PROVINCIAL REAL GDP GROWTH RATES (Seasonally Adjusted and Annualised) 2019Q3, 2020Q2 and 2020Q3

ISBN 978-1-77593-094-5 ECONOMIC REVIEW OF THE EASTERN CAPE GROSS DOMESTIC PRODUCT (GDP)

QUARTERLY DATA RELEASE | QUARTER 3 - 2020 QoQ GDP GROWTH RATE

SOUTH AFRICA EASTERN CAPE 66.1% 61.9%

KEY FINDINGS

Global growth forecasts have been revised to The South African economy is forecasted to contract by -4.4% & 5.2% -8.0% in 2020 in 2021 in 2020 by the IMF.

The SOUTH AFRICAN The EASTERN CAPE PROVINCIAL ECONOMY grew by ECONOMY EXPANDED 61.9%. However, the provincial economy is one of the by 66.1% with four provincial economies with economic expansion MANUFACTURING, MINING below the NATIONAL LEVEL (66.1%) IN 2020Q3, namely: AND TRADE being the largest contributors to GDP growth. 49.2%& 57.7% & 61.9% &62.8% Gauteng Western Cape Eastern Cape KZN

The EASTERN CAPE GDP (at The EASTERN CAPE’S TOTAL GROSS VALUE ADDED market prices) INCREASED by (GVA) at basic prices amounted to R207 716 MILLION. R25 863 million in 2020Q3 to The tertiary sector accounted for 81.5% of the R227 912 MILLION. provincial GVA. Figure 1 GLOBAL REGION / COUNTRY PROJECTIONS DIFFERENCE FROM JAN 2020 WEO UPDATE ECONOMIC 2019 2020 2021 2020 2021 OUTLOOK World 2.8 -4.4 5.2 0.8 -0.2 Advanced economies 1. 7 -5.8 3.9 2.3 -0.9 According to the October update United States 2.2 -4.3 3.1 3.7 -1.4 of the IMF World Economic Euro area 1. 3 -8.3 5.2 1. 9 -0.8 Outlook, the global economy is projected to contract by United Kingdom 1. 5 -9.8 5.9 0.4 -0.4 -4.4% in 2020 owing to the Japan 0.7 -5.3 2.3 0.5 -0.1 current global health pandemic. Emerging markets and However, the economy is developing economies 3.7 -3.3 6.0 -0.2 0.2 projected to remain consistent in 2021, with economic growth Brazil 1. 1 -5.8 2.8 3.3 -0.8 of 5.2%, a downward revision of Russia 1. 3 -4.1 2.8 2.5 -1.3 0.2 of a percentage point from India 4.2 -10.3 8.8 -5.8 2.8 the June 2020 update. Across advanced economies, China 6.1 1. 9 8.2 0.9 0.0 growth is projected at -5.8% Sub-Saharan Africa 3.2 -3.0 3.1 0.2 -0.3 in 2020 and is expected to Nigeria 2.2 -4.3 1. 7 1. 1 -0.9 recover in 2021 to 3.9%. Growth among the sub-Saharan African South Africa 0.2 -8.0 3.0 0.0 -0.5 economies is forecasted to contract this year: Nigeria (-4.8%) and South Africa (-8.0%). Both countries are anticipated to recover in 2021, with growth estimates of 1.7% for Nigeria and 3.0% for South Africa.

Source: IMF World Economic Outlook, 2020

REAL GDP GROWTH RATES (Seasonally adjusted and annualised) 2015Q3 – 2020Q3

Figure 2

SA

80,0 EC

60,0

40,0

20,0

0,0

-20,0

-40,0

-60,0 2019Q1 2019Q2 2019Q3 2019Q4 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2020Q1 2020Q2 2020Q3

Source: Stats SA and Quantec EasyData, 2020

The South African economy grew recorded positive growth. The industries contributed 14.6 percentage points). by 66.1% in 2020Q3, as production with largest positive contributors to The Eastern Cape economy expanded in increased for the first time in 2020. This national growth in GDP in 2020Q3 on QoQ the third quarter amid global pandemic is a reflection of the easing of Covid-19 basis were manufacturing (increased by threat. The provincial economy grew lockdown restrictions. The national GDP 210.0% and contributed 16.2 percentage at a record pace of 61.9% in 2020Q3, growth rate was recorded at -0.8% in points), mining (increased by 288.0% following a decline by 47.4% in 2020QQ2, 2019Q3 and -51.7% in 2020Q2. and contributed 11.8 percentage points) contraction of 0.8% in 2020Q1 and -0.2% In the third quarter of 2020, all industries and trade (increased by 137.0% and in 2019Q3. PROVINCIAL REAL GDP GROWTH RATES (seasonally adjusted and annualised) 2019Q3, 2020Q2 and 2020Q3

LIMPOPO Figure 3 2019Q3 2020Q2 2020Q3 The figure above gives a comparison 0,5% -50,2% 104,9% 2019Q3 of provincial economic growth rates for 0,3% 2019Q3, 2020Q2 and 2020Q3. 2020Q2 SOUTH -54,5% The following observations are drawn AFRICA MPUMA 2020Q3 from the figure: 2019Q3 NORTH WEST -LANGA 126,5% -0,8% 2019Q3 2020Q2 2020Q3 • Compared to the previous quarter, 2020Q2 -3,0%-56,2% 75,4% GDP increased in all nine provinces -51,7% of the country. 2020Q3 FREESTATE KWAZULU- • On a QoQ basis, large GDP growth 66,1% 2019Q3 NATAL 2019Q3 was recorded in Mpumalanga -1,0% 2020Q2 -1,1% GAUTENG (126.5%), Northern Cape (119.5%) 2020Q2 2019Q3 NORTHERN CAPE -51,9% and Limpopo (104.9%) in 2020Q3. 2020Q3 -52,2% -1,3% • Four provinces had economic 2019Q3 2020Q2 2020Q3 69,2% 2020Q3 2020Q2 1,3% -49,0% 119,5% 62,8% -51,6% expansion below the national 2020Q3 level (66.1%) in 2020Q3, namely: 49,2% Gauteng (49.2%), Western Cape EASTERN CAPE (57.7%), Eastern Cape (61.9%) and 2019Q3 2020Q2 2020Q3 KwaZulu-Natal (62.8%). 0,7% -48,1% 61,9% WESTERN CAPE 2019Q3 2020Q2 2020Q3 -0,7% -51,2% 57,7% Source: Stats SA and Quantec EasyData, 2020

GDP Seasonally adjusted at constant 2010 prices (R million)

Figure 4

PERCENTAGE CONTRIBUTIONS TO NATIONAL GDP 2020Q3 EASTERN CAPE GDP AT MARKET PRICES

Mpumalanga Limpopo 240 000 7,7% Western Eastern 7,8% Cape Cape 230 000 13,8% 7,7% Northern 220 000 Cape 2,4% 210 000 5,1% Free State Gauteng 33,9% KwaZulu- 200 000 Natal 15,9% 190 000

5,7% 180 000

North West 2019Q1 2019Q2 2019Q3 2019Q4 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2020Q1 2020Q2 2020Q3 Source: Stats SA, 2020 In rand values, the figure above shows that provincial GDP has increased significantly in 2020Q3 as a result of eased lockdown restrictions which opened and encouraged economic activity. The Eastern Cape GDP (at market prices) increased by R25 863 million in 2020Q3 to R227 912 million. The largest contributors to GDP growth were the trade, manufacturing and transport industries. However, compared with other provinces, the Eastern Cape contributed 7.7% to total national GDP. The largest contributors to national growth in GDP in the third quarter were Gauteng (33.9%), KwaZulu-Natal (15.9%) and Western Cape (13.8%). In the Eastern Cape, all industries contributed Figure 5 GROSS positively to provincial GDP. The manufacturing industry increased at the rate of 203.9% in 2020Q3, VALUE followed by trade at 170.0% and the mining industry ADDED with 163.1% growth QoQ. Government services (seasonally adjusted and recorded the lowest growth of 0.9% in 2020Q3. 203,9% annualised) 2020Q3 39,7% 163,1% 170,0% 0,9% 63,7% 74,8%

16,5% 94,6% 20,1%

Source: Stats SA, 2020

EASTERN CAPE GVA BY INDUSTRY (seasonally adjusted and annualised quarterly) 2019Q3, 2020Q2 and 2020Q3 Figure 6 The Eastern Cape’s total gross value added (GVA) at basic prices amounted to R207 716 million in INDUSTRY 2019Q3 2020Q2 2020Q3 2020Q3. The tertiary sector remained the principal R million Share % R million Share % R million Share % contributing sector to the provincial GVA, accounting for 81.5% of the provincial GVA. The Agriculture 3 041 1.4 3 344 1.8 3 474 1.7 secondary sector and primary sector accounted Mining 614 0.3 371 0.2 473 0.2 for 16.6% and 1.9% respectively. In rand values, PRIMARY in 2020Q3, the tertiary, secondary and primary SECTOR 3 654 1.7 3 715 2.0 3 947 1.9 sectors’ GVA amounted respectively to R169 Manufacturing 28 684 13.3 19 627 10.6 25 914 12.5 251million, R34 518 million, and R3 947 million. In terms of individual sectors, government Electricity 2 489 1.2 2 278 1.2 2 619 1.3 services continued to be the largest contributor Construction 7 940 3.7 5 291 2.9 5 985 2.9 to the provincial GVA, accounting for 24.1% of SECONDARY the total GVA. Finance and trade accounted for SECTOR 39 114 18.2 27 196 14.7 34 518 16.6 20.9% and 20.5% respectively. The government Trade 42 228 19.6 33 195 18.0 42 552 20.5 services sector increased its contribution by 0.9 of a percentage points on a YoY basis. Transport 18 984 8.8 14 336 7.8 16 932 8.2 On a QoQ basis, total GVA for all industries Finance 44 820 20.8 41 536 22.5 43 479 20.9 increased by R22 862 million, largest increases Personal services 16 301 7.6 14 855 8.0 16 151 7.8 in GVA were recorded in trade (up by R9 357 Government million), manufacturing (up by R6 287 million), services 50 094 23.3 50 020 27.1 50 136 24.1 and transport (up by R2 596 million). TERTIARY However, on a YoY basis, GVA contracted in the SECTOR 172 427 80.1 153 943 83.3 169 251 81.5 manufacturing industry (down by R2 770 million) and transport industry (down by R2 052 million), All industries at whilst trade grew by R324 million. basic prices 215 195 100.0 184 854 100.0 207 716 100.0 Source: Stats SA, 2020 EMPLOYMENT AND GROSS VALUE ADDED (GVA) BY SECTOR (QoQ % change)

AGRICULTURE MINING

MANUFACTURING ELECTRICITY

CONSTRUCTION TRADE

FINANCE TRANSPORT

PERSONAL SERVICES GENERAL GOVERNMENT SERVICES