BUSINESS NEWS - South Africa’s gross domestic product (GDP) decreased by 51% in the second quarter of 2020 according to Statistics South Africa, demonstrating the negative impact of the Covid-19 lockdown restrictions. The manufacturing industry was hit hardest, contracting by 74.9% in the second quarter with all ten manufacturing divisions reporting negative growth rates in the second quarter.
Restriction on the sale of goods as well as catering and accommodation saw the trade, catering and accommodation industry decreasing by 67.6%. The decreased economic activity affected wholesale, retail and motor trade, as well as catering and accommodation.
The lockdown restrictions also affected the transport, storage and communication industry which decreased by 67.9%.
Mining and quarrying decreased by 73.1% and contributed -6 percentage points to GDP growth as demand for mineral products fell due to lockdown restrictions and production decreased for platinum group metals, gold, iron ore, chromium ore and coal.
The finance, real estate and business services industry decreased by 28.9% and contributed -5.4 of a percentage point to GDP growth as financial intermediation, insurance and pension funding, auxiliary activities and other business services decreased.
Only the agriculture, forestry and fishing industry was a positive contributor to GDP growth with an increase of 15.1% and a contribution of 0.3 of a percentage point to GDP growth thanks to increased production of field crops and horticultural and animal products.
The unadjusted real GDP at market prices for the first six months of 2020 decreased by 8.7%, compared with the first six months of 2019. This was the fourth consecutive decline in quarterly GDP since the second quarter of 2019.
The lockdown also affected expenditure on real gross domestic product, which fell by 52.3% in the second quarter of 2020. Household final consumption expenditure decreased by 49.8% in the second quarter, contributing -30.8 percentage points to total growth. Consumers spent less on semi-durable and durable goods because these goods were not sold during the initial stages of lockdown, which fell in Q2.
Expenditure on transport (-71.4% and contributing -11.7 percentage points); clothing and footwear (-91.5% and contributing -8 percentage points); alcoholic beverages, tobacco and narcotics (-92.4% and contributing -6.9 percentage points); recreation and culture (-86% and contributing -6.6 percentage points); restaurants and hotels (-99.9% and contributing -6.5 percentage points); furnishings, household equipment and maintenance (-58.2% and contributing -5.3 percentage points); and food and non-alcoholic beverages (-26.8% and contributing -4.5 percentage points) were the main negative contributors to growth in HFCE.