SA’s GDP growth has become more volatile since the Covid-19 pandemic, with many sectors no yet showing a full recovery, a study by economic research institution Trade & Industrial Policy Strategies (Tips) showed.
The organisation analysed trends and development data for the first quarter of 2024 and found that many sectors of the economy were still struggling.
“In the first quarter of 2024, the GDP contracted marginally. For the four quarters to 2024, it grew just 0.7%. That compares to 2.5% annual growth over the three preceding years. In the first quarter of 2024, the GDP was 1.2% higher than in the first quarter of 2020, just before the pandemic,” it said.
According to the study, GDP growth has become markedly more volatile since the pandemic. It shrank in five quarters in the three years to March 2024. That compares to nine quarters of decline in the 24 years to 2018.
The review highlighted that the formal sector accounted for two-thirds of new jobs, while domestic work saw a sharp recovery but remained below pre-pandemic levels.
“The formal sector generated most of the net new jobs growth over the year to March 2024. It added 360,000 positions, expanding by 3.2%.”
While domestic work gained 120,000 jobs this was still below pre-pandemic levels.
Agriculture added 50,000 jobs, for growth of 6.1%, while the informal sector was essentially unchanged.
The Tips study also found that sales in manufacturing had been dwindling over the year to March 2024, with the exception of petrochemicals, wood and paper, glass and clothing.
Mining gained an additional 10,000 jobs in the last quarter of 2023 compared with the previous year. The industry has been experiencing gradual expansion since 2020, largely attributed to soaring metals prices on the international market.
However, it still lags behind its peak during the commodity boom of the 2010s by about 20%, primarily due to the decline in gold production.
The auto and glass industry account for most job losses in the manufacturing industry.
According to the Tips survey, transport equipment shed more than 20 000 jobs in the year to March 2024, for a fall of 20%. Employment in glass and non-metallic minerals declined by a similar amount.
“While auto did see a fall in sales, the employment data derives from a household survey and may be overstated. Similarly, a reported jump of 45,000 jobs in clothing, textiles and footwear over the year seems unlikely. It would mean employment climbed 20% in the industry, although its sales dropped 5% in value and over 2% in volume,” the report stated.
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