The nation’s real gross domestic product (GDP), which had seen two straight quarters of growth, shrank by 0.7%1 in the second quarter of 2022, according to data released on Tuesday by Statistics South Africa (Stats SA).
The nation’s economy was already frail and had only just returned to its pre-pandemic levels when the disastrous floods in KwaZulu-Natal and load shedding added to the downturn, according to Stats SA.
Manufacturing
The national statistics agency reports that manufacturing suffered the most as a result of floods, which negatively impacted a number of businesses.
According to figures from 2019, the manufacturing sector accounts for a fifth of the nation’s manufacturing output, making it the biggest industry in KwaZulu-Natal.
“The national manufacturing production was reduced by 5.9% as a result of damage to factories and facilities, as well as interruptions to logistics and supply networks.”
Petroleum and chemical goods, food and drinks, and transportation equipment all had the greatest decline in growth.
Trade
Additionally, according to Stats SA, power outages nationwide and flooding in KwaZulu-Natal had a detrimental impact on commerce, catering, and lodging.
The sector had a 1.5% decline as floods damaged storage and retail facilities.
Additionally, owing to load shedding, trade hours were lost.
Mining
Diamonds, gold, and coal all contributed to a decline in mining output. Flooding also had an impact on coal production, which also suffered from load shedding.
The principal factor limiting economic activity in the power, gas, and water supply industries was load shedding brought on by a shortage of generating capacity. Water supply problems also occurred as a result of the KwaZulu-Natal floods and the Eastern Cape drought.
Agriculture
According to Stats SA, activity related to agriculture, forestry, and fishing decreased by 7.7% as a result of a decline in the production of animal products.
The drop was influenced by power outages and the development of foot-and-mouth disease.
actual estate
On the plus side, the 2.4% increase in GDP in the second quarter of this year was mostly driven by the banking, real estate, and business services sectors.
Increased activity in the banking industry, as well as in insurance and pension funds, was the main driver of growth.
COVID-19
The COVID-19 effects on the economy took over two years to recover from, with real GDP returning to pre-pandemic levels in the first quarter of 2022, according to Stats SA.
The 0.7% fall in the second quarter of 2022 drove GDP back below the fourth quarter of 2019 before the pandemic level of R1 148 billion, proving that the rebound was fleeting.
According to Stats SA, when all industries are taken into account, the recovery narrative becomes more convoluted.
Using the same technique as a previous piece that compared South Africa’s COVID-19 recovery with that of other nations demonstrates how long it took for each sector to return to its fourth quarter of 2019 level from the second quarter of 2020 when national economic activity was at its lowest.
Only four industries have reached or exceeded their pre-pandemic levels of output by the second quarter of this year.
“Finance, real estate, and business services required two quarters to return to their fourth quarter of 2019 level, while personal services needed three quarters to get back on its feet after seeing a decline in the second quarter of 2020.”
Agriculture, forestry, fisheries, and government all seem to have fared reasonably well throughout the epidemic in terms of actual value added.
Six sectors, including construction, still have not fully recovered. The construction sector has decreased by 24% since the outbreak. – SANews.Gov