South Africa GDP contracts 0.2% as manufacturing slows
South Africa's economy contracted 0.2% in Q2, missing market expectations and ending six consecutive quarters of growth amid slumps in mining and manufacturing. While construction and agriculture showed resilience, rising import costs and persistent investment declines continue to cloud the broader economic outlook.
Stats SA data confirmed the contraction was slightly sharper than the 0.1% decline forecast by Reuters economists, with Q1 growth revised down to 0.4%. The report highlights that imports surged 4.9% on higher machinery purchases, while household consumption remained a bright spot with a 0.4% increase.
Source: GN markets/growth (en-US)New details from GN markets/growth (en-US) reveal that South Africa's imports surged by 4.9% while capital formation declined for a second straight quarter, highlighting deepening investment weakness. The report also notes that despite a 3.0% contraction in mining output due to lower production of platinum group metals and iron ore, the sector remains a primary driver of the recent job losses.
Source: GN markets/growth (en-US)New details from GN markets/growth (en-US) highlight a disconnect between output and hiring, noting that while agriculture and construction expanded, trade actually shed 1.9% of activity despite adding 70,000 jobs. The report also attributes the slowdown partly to the Middle East conflict, which has driven up global oil prices and constrained consumer spending.
Source: GN markets/growth (en-US)New details from GN markets/growth (en-US) reveal that the economic contraction coincided with a loss of 16,000 jobs, pushing the unemployment rate to 33.6%, while economists cite Middle East conflict-driven oil price spikes as a key headwind for business and consumers.
Source: GN markets/growth (en-US)South Africa's economy shrank in the second quarter, marking a reversal from earlier growth. Manufacturing and mining were the primary drivers of this contraction.
Source: GN markets/growth (en-US)
