The production and distribution of electricity contracted further in May as load-shedding continued.
Stats SA reported on Thursday that electricity generation decreased by 4.3% year on year in May.
This followed month-on-month changes of -1.2% in April and -0.1% in March.
Electricity distribution decreased 2.5% year on year.
Due to the declines it is now believed that SA is unlikely to achieve real economic growth of more than 2% this year, with warnings that the economy probably contracted outright in the second quarter.
Investec economist Lara Hodes said the heightened load-shedding — due to Eskom’s recent escalation to stage 6 during certain periods, largely because of unlawful strikes — will continue to weigh heavily on the economy.
“Small and medium-sized businesses are most vulnerable, especially those that cannot afford expensive generators or inverters,” Hodes said.
She said that insufficient electricity supply remains one of the country’s key challenges and has added to the subdued consumer and business confidence readings.
Electricity production declined 3.7% year on year in April, after declining 1.1% year on year in March and 0.4% year on year in February.
Electricity consumption declined 2.0% year on year and 0.4% month on month in April.
FNB economists said a higher incidence of load-shedding should have implications for indicators in the second quarter of the year and are likely to extend into the second half of the year.
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