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Gross Fixed Capital Formation 3rd Quarter 2023

Gross fixed investment (GFCF) increased by a slower pace of 3.3 percent y-y (constant prices) in 2023Q3, following the (revised) 7.6 percent y-y increase in Q2.  Investment growth slowed for both general government and SOE's, with investment by the private sector slowing to a 4.5 percent increase.  The economy contracted by 0.2 percent q-q (seasonally adjusted annualised values) in Q3, with contractions reported in agriculture, mining, manufacturing and construction.   The construction sector fell by 2.8 percent q-q (annualised), or 1.9 percent y-y (not seasonally adjusted). The non-residential sector recorded a moderate 0.6 percent increase (from 8.6 percent in Q2), with residential investment down 4.2 percent and a somewhat surprising 0.9 percent contraction in construction works.  A total of R94.5bn was spent in construction in Q3, keeping the industry below pre-covid levels (20% lower) and 33 percent lower compared to mid 2016 (the start of the more recent downturn). On average, the construction sector has shown some growth for the first three quarters, up 3.4 percent y-y in real terms, with residential investment growth slowing to 1.7 percent, non-residential investment and construction works at 6.8 percent and 3.7 percent respectively. The weaker performance in overall investment for Q3, lower the GFCF/GDP ratio from 15.5 percent in Q2 to 15 percent for the current quarter.

 

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