Business Unity South Africa (BUSA) is encouraged that manufacturing was one of the biggest contributors to the 1.4% growth recorded in the fourth quarter (Q4) of 2018. However, the 0.8% overall growth rate documented for the year is disappointing, especially because of the contractions in mining, construction and gross fixed capital formation, which remain a concern.
“Although moderate, the 0.8% growth recorded in 2018 is welcome, particularly on the back of a 4.5% improvement in manufacturing in Q4. However, the annual growth rate remains off target for the country’s goals of creating a sustainable, competitive economy and of ensuring that we generate jobs. It is a symptom of the overall structure of the economy, which remains concentrated, is not dynamic enough and agile. This is apparent in the low levels of participation by small business,” said BUSA CEO Tanya Cohen.
“Economic growth is a key prerequisite for South Africa improving its sovereign credit ratings, as well as retaining its only investment grade rating. There are encouraging signs, so BUSA remains cautiously optimistic that, with the right policy mix, the alleviation of uncertainty, reforms in state-owned entities, particularly Eskom, together with the political will to implement economic reforms, that South Africa can turn a corner,” Cohen said.