Q3 growth slows as strikes hit factory output
South Africa's economic growth slowed more than expected in the third quarter of the year, official data showed on Tuesday, dragged lower by a contraction in manufacturing after weeks of strikes in the automotive sector.
However, the data is unlikely to alter already pessimistic official growth predictions for 2013. The Reserve Bank last week cut its forecast to 1.9% from the 2% seen in September, while the Treasury now sees 2.1% expansion from 2.7% in February.
Africa's biggest economy grew 0.7% quarter-on-quarter in the third quarter, after rising by a revised 3.2% in the previous three months, Statistics South Africa said.
Manufacturing, which contributes 15% to South African output, fell by 6.6% over the previous quarter, although this was offset by an 11.4% rebound in mining as the sector recovered from its own labour disturbances.
On an unadjusted year-on-year basis, the economy grew 1.8% in the third quarter from a revised 2.3% in the previous three months.
Economists polled by Reuters expected quarter-on-quarter growth of 1.2%, while the year-on-year rate was seen at 2.1%.
"The third quarter GDP data shows growth is weak on significant strike-related work stoppages, falling confidence levels, slowing consumer spending due to high indebtedness and moderating growth in real disposable incomes," said Investec economist Annabel Bishop.
"The failure of South Africa to run at its potential economic growth rate, and so full employment, is an ingrained structural problem of poor education outcomes, labour rigidities and insufficient job creation," she added.
Critics say stringent labour regulations tilted in favour of workers are a deterrent to employment, undermining efforts to slash a jobless rate of about 25% of the workforce.
The rand largely shrugged off the data, partly helped by a globally weaker dollar, while government bond yields were slightly lower.
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