Johannesburg, 6 March 2918 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the improvement in South Africa’s real gross domestic product (GDP) and is encouraged by it, SEIFSA Economist Marique Kruger said this afternoon.
Statistics South Africa reported that the country’s GDP grew by 3.1% during the fourth quarter of 2017, up from a revised 2.3% quarter-on-quarter increase recorded in the third quarter of 2017.
“Given the negative economic headlines at the end of 2017, which included a downgrade of the country’s credit ratings and the possibility of a further downgrade, this is certainly a welcome development. Moreover, the annual growth rate was recorded at 1.3% for 2017, higher than expected and higher when compared to the revised 0.6% increase recorded in 2016,” Ms Kruger said.
The Statistics South Africa data also show that the figures for the fourth quarter of 2016 were revised from negative to positive, indicating that South Africa was not technically plummeted into a recession at the beginning of 2017.
Ms Kruger said that a detailed analysis of the GDP data further indicated that the growth in GDP was largely underpinned by, amongst other sectors, the positive contribution made by the manufacturing sector. The industry grew by 4.3% quarter-on-quarter in the fourth quarter of 2017, following a 3.7% quarter-on-quarter growth in the third quarter of 2017.
Ms Kruger said a nuance of the performances of the various sub-sectors of manufacturing highlight the positive contribution made by some sub-components of the Metals and Engineering (M&E) sector. The best performers in the M&E sector in the fourth quarter of 2017 were the rubber and plastic products, the basic iron and steel, non-ferrous metal products, metal products and machinery sub-components.
“Generally, indications are that the M&E sector is still under tremendous pressure stemming from structural problems, volatility in input costs and international commodity prices. However, we are hopeful that improved business and consumer confidence in light of recent local political developments will carry through in 2018, thereby allowing business to take advantage of increased optimism,” Ms Kruger concluded.