Economic growth is at the centre of national priorities, and over the past few weeks the measurement of growth has received considerable attention.
This is not only because of the emphasis placed on it in the minister of finance's budget presented to parliament last week. In his state of the nation address to a joint sitting of parliament on February 3, President Thabo Mbeki noted that the people of South Africa expected government to "make the necessary interventions with regard to the first economy to accelerate progress towards the achievement of higher levels of economic growth and development of at least 6 percent a year".
The president also reported that all three spheres of government - national, provincial and local - "have been working together for some months to elaborate the specific interventions that will ensure that Asgisa, the accelerated and shared growth initiative of South Africa, succeeds in its purposes, which include the reduction of the unemployment levels".
In this context of heightened awareness over the relationship between economic growth and job creation, Statistics SA will be releasing the latest data on gross domestic product (GDP) next week Tuesday, February 28. This will provide information on economic growth for the fourth quarter of last year, as well as the preliminary indications for the whole of 2005.
The compilation of GDP estimates is reliant on a wide range of social and economic statistics. These include results of Stats SA monthly surveys on mining, manufacturing, electricity, retail and wholesale trade sales, and motor vehicle sales.
Over the past few months, including the end-of-year period when many others took a needed break from work, the engine room of official statistics continued its collection, processing, analysis and publication of the monthly data needed for GDP estimation for the fourth quarter of 2005.
Recently published information includes data on electricity generated and available for distribution, which is an early indicator of economic activity in a given month.
Both production and consumption of electricity increased for December 2005 compared with a year ago. While overall production of electricity in South Africa last year remained virtually unchanged, reflecting only a 0.1 percent increase compared with 2004, consumption of electricity increased by 0.6 percent between 2004 and 2005.
The manufacturing industry is the second-largest contributor to total value added in the economy, with a contribution of 19.1 percent in 2004. As a result, the behaviour of this industry has a large influence on the economic growth rate for the entire economy.
Manufacturing production estimates for December indicated an increase of 6.2 percent compared with the previous year. In the fourth quarter of 2005, manufacturing production remained virtually unchanged, reflecting an increase of 0.1 percent in the seasonally adjusted estimates compared with the third quarter.
Low production in the petroleum industry during the last quarter was an important factor limiting growth in the manufacturing industry during this quarter.
Manufacturing output growth for the whole of last year totalled 3.5 percent, compared with 4.4 percent in 2004. Higher production was reported by seven of the 10 manufacturing divisions, mainly in food and beverages as well as the motor vehicles, parts and accessories, and transport equipment divisions.
Private sector building activity has increased strongly, as shown in the results of the building statistics survey among large local government institutions published last week. The value of building plans passed last year surpassed the figure for 2004 by 51.4 percent, with the largest increase recorded in the value of plans passed on new residential buildings. A similar trend is evident in the value of buildings completed during this period, which increased by 40.2 percent, or R9.083 billion.
Retail trade sales, at constant (2000) prices, for the three months to November increased by 6.8 percent compared with the three months to November 2004.
Similarly, retail trade sales at constant prices for January to November 2005 increased by 6.5 percent compared with January to November 2004. Retail trade sales at constant prices for November increased by 8.1 percent compared with November 2004. Retail trade sales at current prices for the three months to November increased by 11.2 percent compared with the three months to November 2004.
The suite of short-term data released monthly by Stats SA ensures that quarterly estimates of GDP can be published within about 60 days after the reference period. Next week's release of the latest GDP data will be eagerly awaited, not only by economic policy makers, but by a far wider range of stakeholders who have been drawn into the policy and implementation debates associated with economic growth and job creation.
Published on the web by Business Report on February 23, 2006.
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