GDP Growth Undershooting !!! The data and daily life draw two different pictures....... SA growth has slowed to +0.7% quarter to quarter annualised, and the year-on-year growth was only +1.8% in the third 2013. This is now also the expected tally for 2013 overall......... Yet overfull planes, eight-lane highways disgorging their burdens daily, premium parking at popular shopping malls, and more such visuals give a sense of an overworked, fast-paced, fun-loving core to the economy steadily expanding its prosperity and drawing more newcomers to its ample bosom. •The data draw an entirely different picture. Mining and agriculture bounced 9% annualised this past quarter, but that was after the earlier strike bound dip. The present quarter will probably again see strike-related output losses, and next year is unlikely to be free from labour strife. Indeed, in the third quarter of 2013 it was again the motor industry (and construction) that had to go on bended knee for strike action, with industrial activity falling at a 6.6% annualised pace. There should be some rebound there in the current quarter, even though the labour disruption spilled over into this quarter, and next year it may be the turn of other industrial niches to encounter strike losses. But besides this volatile growth rollercoaster in SA mining and industry, parts of the services sector also disappointed. The financial sector reportedly suffered from slowing volumes in financial markets, while retail, wholesale and motor trade saw the impact of much slower income growth, more constrained access to credit and probably not as many job additions as was wished. Yet this economic upswing, which started rather promising in mid-2009, has not been all that different from the opening stanzas of business upswings since the early 1980s. Indeed, so far we have been tracking rather closely the early stages of the long 1999-2007 upswing. Except that upswing at about this moment in its long build-up suddenly started to accelerate spectacularly, growing into a major boom, driven by startling commodity price gains, World Cup fever, speculative credit binging and growing levels of hubristic confidence, which if they were now also around the corner remain remarkably well hidden from view. So a slow start to cyclical expansion may not signal overly much as to what could follow in mid-cycle. Still, the economy gives little inkling of shortly surprising us with an unexpected growth spurt. If anything, despite hope refusing to die as forecasts keep looking for some lifting next year and beyond, what seems to be coming our way may be more rather than less growth stagnation. Supply constraints such as electricity are yet to lift meaningfully, labour strikes may remain plentiful and bite, business confidence remains poor and consumer confidence mostly subdued as nothing critical shows evidence as yet of wanting to turn for the better. Yes, global growth seems to be lifting a bit into next year, this time led by the rich developed countries, but has our trade competitiveness in recent times lost ground to hungrier emerging market (EM) countries for our producers to be unable to reap the benefits of faster global growth, even with the rand now undervalued? If anything, many of our businesses are ensuring their share of the lifting global growth, but they are doing it by directly participating ever more vigorously in other EM growth market opportunities. So the growth gains are not entirely lost to us, except that our labour force doesnt get to share in it and the development boosts pass us by and favour others. One would have expected a greater growth drive ahead of a bruising general election sometime next year, but instead there appears to be yet more policy paralysis and political infighting doing little to lift the mood of the country (if not actively depressing it yet further). The grass is not necessarily greener on the other side. Many EM countries are also still experiencing disappointing economic performances. So we are not alone in doing so, but let that not be an excuse for letting things be as they are. Compiled by :- Kgomotso Mohajane Tel :- 011)783-4700 ext (16)
Posted on: Mon, 02 Dec 2013 13:28:07 +0000
Trending Topics
Recently Viewed Topics
© 2015