The latest sign of recession – SA mining production tanks 5% year-on-year in February
Against the backdrop of intensive rolling blackouts, there is little chance that the economy did not contract in the first quarter of 2023.
In the latest sign that South Africa’s economy is likely to be in the throes of a recession, mining production dropped 5% year-on-year in February and 4.9% monthly.
The data, unveiled on Thursday by Statistics South Africa (Stats SA), highlights the steady slide of South Africa’s once towering mining industry and is another clear sign that the economy is contracting.
Mining production fell year-on-year in February by 5.0%, its 13th straight month of annual decline. Coal output was down 12.6%, highlighting the challenges faced by an industry – an onslaught of crime chief among other headaches. Diamond production plunged more than 45%.
But iron ore production bucked the trend, rising more than 30% despite the challenges that producers such as Kumba Iron Ore face in getting their product to port by rail amid Transnet’s struggles.
Every month overall mining production declined by 4.9% from January. This was the first monthly decline since November 2022.
Power outages and rampant criminality are among the factors that are combining with policy inertia to torpedo South Africa’s mining sector, which still plays an absolutely critical role in the economy.
And the data, coming in the wake of a 5.2% annual decline in manufacturing output in February and a weaker March BETI (BankservAfrica Economic Transactions Index) – which tracks transactions between the country’s banks – almost seals the case that South Africa’s economy has likely fallen into a recession after contracting 1.3% in the fourth quarter (Q4) of last year.
Read more in Daily Maverick: All BETIs are off as key Economic Transactions Index takes a tumble
Against the backdrop of such intensive load shedding, there seems to be little chance that the economy did not contract in Q1 of this year.
South Africa and South Africans are poorer as a result. DM/BM