South African mining output declined for the 14th consecutive month on an annual basis, falling 2.6% year on year in March, Statistics South Africa said on Thursday. Diamond production plunged almost 55% over that timeframe, while platinum group metals output tanked over 9%. 

But on a monthly basis, production spiked 6.5% in March compared with February, adding up to 1% growth in the first quarter (Q1) of 2023 compared with the previous three months. That means the mining sector should make a small positive contribution to the gross domestic product data for the quarter, which will be released in June.

The manufacturing data, also released on Thursday, painted a similar picture. The sector posted its fifth consecutive annual production decline in March, a year-on-year fall of 1.1%. But on a monthly basis, it rose 4% for a 1.4% increase in the first three months of the year compared with Q4 2022. 

That leaves the jury out on the prospect that the economy has fallen into a recession, but any growth will still be negligible. 

“There is a lot of volatility in the growth that we are seeing because of load shedding. But I expect the economy to avoid a recession and the number that we have is 0.5% growth rate quarter on quarter,” Jee-A van der Linde, an economist at Oxford Economics Africa, told Business Maverick. 

“Having said that, the currency is soft and consumers have come under pressure. But the economy can still not produce any meaningful growth under the current circumstances. The bigger picture is gloomy,” he said. 

The rand on Thursday was flirting with record lows against the dollar, above the 19/dollar level, a clear indication of a collapse of confidence in an economy that has been waylaid by a power crisis that has compounded other shortcomings of a failing state. 

The economy will almost certainly post virtually no economic growth this year with the power shortages likely to worsen as winter descends. And the rand’s renewed tumble will stoke the embers of inflation and trigger further interest rate hikes. 

Whether South Africa has dodged a recession or not, the outlook for the economy and any prospects for job creation remain grim. DM/BM