---
title: "Q4 SA mining output suggests downturn dodged despite dreadful December"
description: "On a monthly basis in December, South African mining output slid 4.2% compared with November. But a seasonally adjusted 2.5% rise in the fourth quarter compared with the previous quarter suggests the economy may have dodged a recession."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "RECESSION WATCH"
author: "Ed Stoddard"
author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-02-13-q4-sa-mining-output-suggests-downturn-dodged-despite-dreadful-december/"
published: "2024-02-13T21:05:33"
lang: "en-ZA"
word_count: 494
---

# Q4 SA mining output suggests downturn dodged despite dreadful December

> On a monthly basis in December, South African mining output slid 4.2% compared with November. But a seasonally adjusted 2.5% rise in the fourth quarter compared with the previous quarter suggests the economy may have dodged a recession.

By Ed Stoddard · Published 13 February 2024, 23:05 SAST

## Key points
- South Africa's economy narrowly avoided a recession, thanks to a positive contribution from the mining sector, which saw a rise in production and mineral sales, although the downward trend in annual production remains concerning and job growth in the sector is unlikely amidst depressed prices and other challenges.
- South Africa's economy narrowly avoided a recession after contracting 0.2% in Q3, according to data from Statistics South Africa.
- Manufacturing production slumped 4.2% in December compared to November, but overall production rose 2.5% in the last quarter of 2023.
- The mining sector made a positive contribution to Q4 GDP growth, preventing a technical recession.
- Despite concerns over downward annual production trends, the mining sector added 7,500 jobs in 2023, but layoffs are expected this year.

## Content

The data, unveiled by Statistics South Africa on Tuesday, was a mixed bag. But the good news, in the wake of disappointing manufacturing data last week, is that South Africa’s economy may have narrowly averted falling into a recession after contracting 0.2% in Q3.

The December read was awful, with production slumping 4.2% on a monthly basis compared with November, when output increased 2.7% month-on-month.

But the shaft it descended looks like it was perhaps not deep enough to drag the economy into a downturn.

Production rose 2.5% on a seasonally adjusted basis in the last three months of 2023 compared with the preceding quarter. Manufacturing production by contrast was flat for that period, with growth of only 0.1%.

So the one industrial arm of the economy that may prevent a recession – defined as two straight quarters of overall economic contraction – will be the mining sector.

“... the mining sector made a positive contribution to Q4 GDP (gross domestic product) growth, aligning with our view that the economy avoided a technical recession,” said FNB Senior Economist Thanda Sithole in a note on the data.

On a year-on-year basis in December, production increased 0.6% compared with the previous December – well shy of a Reuters consensus figure of year-on-year growth of 4.9%.

For 2023 as a whole, mining production fell 0.4%, which was far less precipitous than the 7.2% slide recorded in 2022.

It still means that output remains lower than it was in 2021 when it had a 12.7% bounce after the hard pandemic lockdowns of 2020.

Mineral sales at current prices managed a hefty year-on-year rise of 9.2% in December. This was driven largely by a 127.7% surge in sales of gold, which saw its price scale record highs last year in both dollar and rand terms.

Iron ore sales were up over 60% year-on-year in December but would have been even better were it not for Transnet’s woes, which severely affect producers of bulk commodities. Iron ore goes by rail and ship. Gold – its prices in ounces rather than tonnes – is flown out of the country.

The downward annual production trend remains deeply concerning.

The mining sector still managed to add 7,500 jobs last year, with total employment reaching 477,000, according to the Minerals Council SA.

**Read more in Daily Maverick:**[SA mining employment rises in 2023, exports slide](https://www.dailymaverick.co.za/article/2024-02-05-sa-mining-employment-rises-in-2023-while-exports-slide-on-eskom-and-transnet-crisis/)

That’s no small feat in a country with an unemployment rate that is above 40%, based on its broadest definition, and in an economy that is barely growing.

But it seems unlikely the sector will grow more jobs this year. Layoffs are seen looming in the platinum group metals sector in the face of depressed prices.

Meanwhile, like other industries, mining is grappling with the power, logistics and crime crises, and a still fragile – if slowly rebounding – global economy that is depressing prices for most commodities, with notable exceptions like gold, which thrives in uncertain times. **DM**