Economy grew

SA’s economy grew much more than expected in the second quarter — by a seasonally adjusted and annualised 3.3% — after a 1.2% contraction in the first quarter. The economy expanded by 0.6% in the second quarter of 2016 compared with the second quarter of 2015, Statistics SA data showed on Tuesday.

Markets had expected growth of 2.7% in the second quarter compared with the first. Manufacturing and mining and quarrying were the main contributors to gross domestic product (GDP) as measured by production in the second quarter, data showed. Mining and quarrying grew by 11.8% largely as a result of higher production of platinum group metals. Only agriculture, forestry and fishing; and electricity, gas and water contracted in the second quarter.

On the expenditure side, spending on GDP grew 3.4% in the second quarter. Spending by households and government increased but gross fixed capital formation — mainly a proxy of spending by the private sector — fell by 4.6% in the second quarter. This was its third consecutive quarterly decline. The main reasons for the decline were falls in spending on construction works, and on machinery and other equipment.

Net exports contributed positively to total spending on GDP, data showed. Exports were up 18% while imports fell by 5%. There was a R23bn drawdown of inventories in the second quarter after a R1bn build-up in the first quarter.

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