South Africa’s Gross Domestic Product (GDP) for the second quarter of 2020 shrank by a mammoth 51%, mainly as a result of the Covid-19 lockdown coming into effect during that period, a report by Stats SA shows.
The quarter-on-quarter seasonally-adjusted annualised GDP is adjusted for inflation and seasonal changes, was expected to show a sharp decline on that for the first quarter, as a result of the five-week long lockdown bring a halt to most economic activity.
The 51% drop was not far off from the 50% fall predicted by Efficient Group chief economist Dawie Roodt on the MoneyWebNow podcast, on Tuesday morning.
Roodt did expect the lifting of some the lockdown restrictions to lead to a recovery in the third quarter, but expected GDP for the year to be down about 10% for the year.
The drop off in growth was across the board, with no sectors showing any rises.
“The manufacturing industry contracted by 74,9% in the second quarter. All ten manufacturing divisions reported negative growth rates in the second quarter. The divisions that made the largest contributions to the decrease were basic iron and steel, non-ferrous metal products, metal products and machinery; food and beverages; and petroleum, chemical products, rubber and plastic products,” Stats SA reported.
All the industrial sectors declined and only the agriculture, forestry and fishing industry showed positive growth.
- The manufacturing industry contracted by 74.9%
- The trade, catering and accommodation industry decreased by 67.6%
- The transport, storage and communication industry decreased by 67.9%
- The mining and quarrying industry decreased by 73.1%
- The finance, real estate and business services industry decreased by 28.9%
- The agriculture, forestry and fishing industry increased by 15.1%
Households felt the brunt of the lockdown with household final consumption expenditure dropping 49.8% and contributing -30,8 percentage points to total growth.
Q2 GDP -51.0%. All sectors contracted but Agriculture which contributed 0.3ppts to the quarterly GDP number. #SAGDP
— Thabi Leoka (@thabileoka) September 8, 2020
South Africa GDP declined by a massive 51% in the 2nd quarter of 2020 measured quarter on quarter. Mining fell by -73%, manufacturing down -75%, transport crashed by -68%, construction -77%, and retail -68%. In contrast agriculture grew by 15%. Huge impact of economic lockdown
— kevin lings (@lingskevin) September 8, 2020
— Stats SA (@StatsSA) September 8, 2020
Lockdowns & length & depth matter! SA GDP done and dusted. Further proof lockdown kill economies. Red are long lockdowns countries. Yellow softer and shorter lockdowns. Green no lockdowns. Orange is state level differences. Blue uncertain. but all countries had COVID. Red is bad! pic.twitter.com/seWozgQNMA
— mike schussler (@mikeschussler) September 8, 2020
Chart of the day: South Africa’s agriculture gross value-added grew by 15.1% q/q on a seasonally adjusted and annualised basis in the second quarter of 2020, following an expansion of 27.8% q/q in the first quarter. 1/ pic.twitter.com/mEC7CKvx0L
— Wandile Sihlobo (@WandileSihlobo) September 8, 2020