SACCI
“The voice of business”
Gross Domestic Product (GDP), 4th Quarter 2011
Seasonally adjusted real GDP at market prices for the fourth quarter of 2011 up 3.2%
Real annual GDP in 2011 up by 3.1 per cent
The seasonally adjusted real GDP at market prices for the fourth quarter of 2011 increased by an annualised rate of 3.2 per cent compared with an increase of 1.7 per cent (revised from an increase of 1,4 per cent) during the third quarter of 2011.
Real annual GDP increased by 3.1 per cent in 2011 compared to 2.9% in 2010.
The main contributors[*] to the increase in GDP the fourth quarter of 2011 were:
· wholesale, retail and motor trade, (0.7%)
· catering and accommodation industry (0.7 %)
· the manufacturing industry (0.6%)
· general government services (0.6%)
· finance, real estate and business services (0.5 %),
· the transport, storage and communication industry (0.3%), and
· personal services (0.2%).
The seasonally adjusted real annualised value added by the secondary and tertiary sectors each increased by 3.5 per cent, while the primary sector recorded a decrease of 1.0 per cent during the fourth quarter of 2011.
In 2011 as a whole the main contributors to GDP were the:
· finance, real estate and business services (0.7 %)
· general government services (0.5%)
· wholesale, retail and motor trade (0.5%)
· catering and accommodation industry (0.5%)
· the manufacturing industry (0.4%) and
· transport, storage and communication industry (0.3%).
Comments
GDP recovered significantly during the fourth quarter of 2011. The increase in economic growth of 3.1% for 2011, and 3.2% for the fourth quarter comes in slightly above the SACCI expectation of 2.9%. The stronger contribution of the manufacturing sector to GDP is encouraging especially in light of weaker output of the sector in the second and third quarters.
SACCI is optimistic regarding economic growth over the short to medium term. The South African economy has demonstrated resilience in an uncertain global economic environment. South African GDP will continue to strengthen as the uncertainties in the global economy subsides, led by increased household consumption, and an uptick in both public- and private-sector investment. The focus on infrastructure by the National government could see the construction sector seeing increased activity.
An expected improvement in consumer confidence in the euro area during the latter half of 2012 will stimulate demand in these economies especially in retail as well as the manufacturing sector. South Africa stands to gain from this improvement in demand for manufactured goods since Europe is the biggest export market for the South African manufacturing industry.
A stabilisation in the EU markets and the US economy will also see institutional investors again attracted to the higher yielding emerging markets with South Africa a traditional beneficiary of these flows
However, risks to the outlook remain. The uncertainty around energy prices (impacting on domestic price levels), high regulatory burdens and the existing structural bottlenecks in the economy remains prominent. Growth is thus expected to average just above the 3% mark with acceleration in the latter half of the year on the back of increased activity, stronger capital formation due to pent-up investment funds and technical base effects.
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