South Africa has entered a technical recession, with gross domestic product (GDP) contracting by 0.7% in the first quarter of the year. In addition, ratings agency Moody's announced the third downgrade of South Africa's credit rating, following those by Fitch and S&P Global Ratings. However, Moody’s kept the country at investment grade with a negative outlook, rather than “junk status”.

Recession downgrade for SAThese factors are putting added pressure on all areas of the economy. According to the National Treasury, if the current growth rate is sustained, there will be a further decline in GDP per capita and revenue risking the sustainability of South Africa’s fiscal framework.

“The current state of the economy puts more pressure on us as government, business, labour and broader society to intensify our growth programme and improve confidence as a matter of urgency to arrest the decline and set the economy on a higher growth trajectory,” Treasury said in a statement.

Moody cited South Africa’s “reduced growth prospects” as one of the reasons for its downgrade. According to the latest figures, most industrial sectors in the country saw a decline in the first quarter.

The electricity, gas and water industry contracted by 4.8%, owing to decreases in electricity produced in the first quarter, as well as a lower amount of water distributed. The construction industry decreased by 1.3%, with decreases for non-residential buildings and construction works helping the drop.

The manufacturing industry, which contributed -0.5 of a percentage point to GDP growth, contracted by 3.7%. Seven out of ten divisions in the manufacturing sector reported negative growth rates in the first quarter, with the largest contributor to the decrease being the petroleum, chemical products, rubber and plastic products industries, StatsSA said.

The mining and quarrying industry, however, increased by 12.8%, and contributed 0.9 of a percentage point to GDP growth. This was largely the result of higher gold and other metal ore production. In a statement, the Steel and Engineering Industries Federation of Southern Africa (Seifsa) welcomed the 12.8% increase in mining production, pointing out that the mining industry constituted about 25% of the metals and engineering sector’s demand profile.

Image credit: Copyright: cooldesign / 123RF Stock Photo


African Fusion

AfricanFusionAfrican Fusion, the official publication of the Southern African Institute of Welding (SAIW), aims to provide up-to-date insight into welding technology and the welding industry.

Capital Equipment News

Capital Equipment News is dedicated to the application of equipment and modes of transport that are used in the mining, construction, quarrying, and transport industries.

Construction World

ConstructionWorldConstruction World was first published in 1982 and has grown to become a leader in its field, offering a unique mix of editorial coverage to satisfy the diverse needs of its readers.

Electricity + Control

ElectricityandControlE + C publishes innovative, technical articles that provide solutions to engineering challenges in measurement, automation, control, and energy management.

Lighting in Design

LightingandDesignLighting in Design is a glossy, upmarket publication aimed at lighting professionals. It is the only B2B magazine in SA that is dedicated solely to the subject of lighting.

MechChem Africa

MechChemJanuary2017cover MechChem Africa supports African engineering and technical managers across the full spectrum of chemical and mechanical disciplines.

Modern Mining

ModernMiningEstablished in 2005, Modern Mining is one of SA's leading monthly mining magazines, noted for the quality and accuracy of its writing and the breadth of its coverage.

Modern Quarrying

ModernQuarryingModern Quarrying is firmly entrenched as a leading industry-specific magazine. It focuses on promoting the science and practice of quarrying and processing in southern Africa.

Sparks Electrical News

SparksElectricalNewsReadable and informative, Sparks Electrical News is the newspaper for those involved in installing and maintaining electrical supplies and equipment.

Full Name*
Invalid Input

Company Name*
Invalid Input

Your Email*
Invalid Input

Invalid Input

Postal Address 1*
Invalid Input

Postal Address 2*
Invalid Input

Postal Code*
Invalid Input

Street Address 1
Invalid Input

Street Address 2
Invalid Input

Postal Code
Invalid Input

Town / City*
Invalid Input

Invalid Input


Invalid Input

Invalid Input