SA's economic growth continues
Michael Appel
28 November 2007South Africa's economy grew at a higher than expected 4.7% in the third quarter of the year as compared to 4.4% in the previous quarter, with increased economic activity driven by sectors like finance, real estate and construction, Statistics South Africa (Stats SA) reported on Tuesday.
According to Stats SA, other sectors driving gross domestic product (GDP) growth included business services, retail, transport and general government services.
Finance, real estate and business services constituted 2.5 percentage points, while wholesale, retail and motor trade were 0.6 percentage points. Construction came in at 0.5 percentage points, and the general government sector registered 0.4 of a percentage point of GDP.
"The seasonally adjusted real annualised value added by the non-agricultural industries increased by 5.1% during the third quarter of 2007, following annualised increases of 5.1% and 4.4% during the first and second quarters respectively," Stats SA said.
Russell Lamberti from Econometrix Treasury Management told BuaNews that the latest figures had come in significantly higher than was expected.
"It was a good surprise as we obviously don't want to see an end to growth in the economy," Lamberti said. "The GDP figure was very strongly buoyed by the financial and construction sectors, [however], whilst growth is always positive, it's sometimes the quality of growth that's more important.
"The financial sector - which is currently the biggest driver of the economy - is unfortunately not a very labour absorbing industry."
Three sectors of the economy South Africa must look to grow, he said, were manufacturing, construction and mining, as these would create substantial employment opportunities.
"The lack of growth in the manufacturing sector has been particularly worrying, with the past two quarters both experiencing negative growth," he said. "This, in effect, means the manufacturing sector in South Africa is in recession, and retail and wholesale are also slowing down."
Lamberti noted that construction growth was not being driven by residential demand - which indicated that mortgage loans were reducing - but by strong infrastructural spending by government on things such as road and housing developments.
Source: BuaNews
