SA economy demonstrates resilience through multiple gains

SA economy demonstrates resilience through multiple gains

Despite the prevailing difficult global economic conditions, South Africa’s economy continues to demonstrate its resilience, with multiple gains being achieved towards the country’s economy, investment and trade.

These include the 0.6% expansion of the Gross Domestic Product (GDP) in the second quarter of 2023, a R5 billion investment pledge by auto component manufacturers, job creation at the Rainbow Chickens facility in Hammarsdale and an investment by Stellantis to develop a greenfield manufacturing facility.

“Cabinet is pleased with the resilience of the South African economy as shown by South Africa’s GDP second quarter data, as released by StatsSA. This is despite the prevailing difficult global economic conditions and the persistence of the electricity situation in the country,” Minister in The Presidency Khumbudzo Ntshavheni said on Thursday.

According to Stats SA, six industries on the supply side of the economy grew in the second quarter, with manufacturing and finance driving much of the upward momentum.

“The manufacturing industry increased by 2.2% in the second quarter, contributing 0.3 of a percentage point to GDP growth. The continued improvements in manufacturing data indicates improvements in the production capacity, which in turn contributes to an increase in total manufacturing employment.

“The petroleum, chemical products, rubber and plastic products division made the largest contribution to the increase in the second quarter. The basic iron and steel, non-ferrous metal products, metal products and machinery division also made a significant contribution to the growth in this industry,” the Minister said.

The finance, real estate and business services industry increased by 0.7% in the second quarter, contributing 0.2 of a percentage point to GDP growth while the agriculture, forestry and fishing industry increased by 4.2%, contributing 0.1 of a percentage point to GDP growth.

The personal services industry increased by 0.7% in the second quarter, contributing 0.1% of a percentage point to GDP growth.

The Minister made these remarks during a media briefing in Pretoria on the outcomes a Cabinet meeting that was held on Wednesday.

Cabinet had at the meeting also welcomed a pledge for an investment worth approximately R5 billion by auto component manufacturers made at the National Association of Automotive Component and Allied Manufacturers (NAACAM) show recently.

“These pledges by companies operating in South Africa show the confidence of the industry in the South African market and the opportunities to localise the production of components, providing auto assemblers with a more resilient supply base.

“Shortly after the announcement, the Minister of Trade, Industry and Competition officially opened the Benteler plant extension in the Eastern Cape, producing components for local car assemblers. The expansion of production is estimated to replace imports worth R1 billion and the workforce grew to 743 workers,” Ntshavheni said.

Gains in poultry sector

Cabinet said the recent job creation for 750 people at the Rainbow Chickens facility in Hammarsdale demonstrates the success of the implementation of the Poultry Masterplan.

“During 2017, Rainbow Chickens had retrenched more than 1 000 workers and closed operations. After adoption of the masterplan, government implemented a variety of measures to safeguard the local poultry industry including placing anti-dumping duties on poultry imported from producers in five countries.

“This, together with increased investment and measures to transform the industry and bring more black-owned firms into the market, has seen real successes,” Ntshavheni said.

Rainbow Chickens has since re-opened and invested R220 million.

In addition, the overall employment within the poultry industry has been reported to have increased by 2 780 jobs and more than R2 billion in fresh investment has been implemented.

Meanwhile, Cabinet welcomed the confirmation by Stellantis of its intention to develop a greenfield manufacturing facility in Coega, South Africa. The greenfield manufacturing project is planned to be completed by the end of 2025.

“The first launch, planned for early 2026, is for a 1 T pick-up truck, with volumes expected to reach up to 50 000 annually, including for export, in line with the industry masterplan, known as the Automotive Production Development Program (APDP).

“Direct employment to support the first capacity step is expected at 1 000 jobs. Stellantis will be massively investing in over 500 000 hours in training and skills to develop and support the local teams to the level of global standards. We are targeting a localisation rate over 30%,” the Minister said. – SAnews.gov.za

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