https://www.engineeringnews.co.za

GDP figures still a cause for concern – Seifsa

Seifsa chief economist Henk Langenhoven

Seifsa chief economist Henk Langenhoven

Photo by Duane Daws

26th November 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

Font size: - +

Despite a marked increase in South Africa’s gross domestic product (GDP) during the third quarter of the year, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief economist Henk Langenhoven warned that “very concerning trends” were in play that lent doubt to the actual credibility of a potential 3.5% growth rate.

Statistics South Africa this week revealed that the economy had improved by an adjusted 0.5% in the second quarter of the year to 1.4% in the third quarter.

While the adjusted second-quarter growth was in line with the latest estimates presented by Finance Minister Nhlanhla Nene earlier this year in the Medium-Term Budget Policy Statement, overall performance remained “very disappointing”, he said.

Langenhoven said the latest restated and rebased manufacturing data showed stagnation in the sector’s growth rates since 2010, with manufacturing production recovery only now reaching pre-2008 levels.

“The 2010 data reflected recovery after a contraction of 10.6% in 2009. Annual expansion slowed down from 5.9% in 2010 to 2.9% in 2011, 1.9% in 2012 and 0.7% 2013, with the three quarters of 2014 contracting by 0.2%.”

However, Langenhoven pointed out that “the volatility is something to behold,” citing seasonally adjusted quarterly growth fluctuating between 6% and -1.2% in 2012, and between 12.3% and -8% in 2013.

The current year to date “simply” recorded contractions in the sector to different degrees.

“Quarter one was -6.4%, quarter two was -4% and quarter three was -3.4%,” he stated.

“These are, indeed, very concerning trends,” Langenhoven said.

The metals and engineering sector experienced a similar trend with a contraction of 21% in 2009 before recovering to growth of 4.3% in 2010. In 2011 and 2012, growth slowed to 4.1% and 0.2% respectively before registering an uptick of 2.6% in 2013.

However, a contraction of 2% was experienced in the first three quarters of 2014, leaving metals and engineering production “still 12% below the 2008 peak”.

“Coinciding indicators, such as capacity utilisation and employment numbers, confirm the difficult trading conditions within the sluggish domestic economy and tentative world economic recovery,” said Langenhoven.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
Magni SA
Magni SA

Magni SA is committed to developing the safest Telehandlers available to our customers for underground and surface mining, construction, forestry,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.206 0.264s - 174pq - 2rq
Subscribe Now