Despite South Africa’s economy emerging from hard lockdown, the sustained negative effects of the Covid-19 pandemic continue to wreak havoc on economic growth. 

This time last year the country’s gross domestic product (GDP) decreased by 2%, continuing the recessionary trend. 

According to Statistics South Africa (StatsSA) the economy grew by 1.1% in the first quarter (January to March). This translates to an annualised growth rate of 4.6%. 

As encouraging as the news is that the economy is growing, StatsSA said the economy is 2.7% smaller than it was in the first quarter of 2020.

Last year, some of the hardest-hit sectors were mining and quarrying, which fell by 21.5%, followed by the manufacturing industry, which saw an 8.5% downward trend.

This year, the mining industry grew by 18.1%, boosted by the production of iron ore, gold, and chromium. However, StatsSA said manganese ore, coal, and diamonds recorded lower production figures in the first quarter.

Manufacturing saw an annualised growth of 1.6%, which StatsSA attributed to a growth in motor vehicle production and wood, paper, and printing, boosted by a substantial increase in newspaper sales.

Electricity, gas, and water industries contracted by 5.6% in the first quarter of last year, while construction contracted 4.7%.

In 2021, electricity, gas, and water - marred by load-shedding - shrunk by 2.6%. Construction rose slightly by 0.8%. 

Many industries proved resilient, despite intense lockdown restrictions last year. 

Finance, real estate, and business services grew by 3.7%. In 2021, the sector increased at an annualised rate of 7.4%, mainly driven by property services and the banking sector. In the banking sector, StatsSA said there was a rise in the number of credit extensions. 

Increases were also recorded in the agriculture, forestry, and fishing industry last year, which increased by a significant 27.8%. This industry did not enjoy the same increases this year, with agriculture shrinking by 3.1%. 

The Citizen