Johannesburg - Global recessionary conditions have hurt economic growth in 2008, with certain sectors set to remain under pressure, according to economists.
Investment Solutions economist Chris Hart says forecasts for South Africa's economic growth have been cut back, with roughly 1% growth in gross domestic product (GDP) expected for 2009, although the pace will pick up towards the end of the year.
"The first half of the year will be characterised by recessionary conditions, while the second half will be a recovery phase where we will see economic growth."
Hart's forecast correlates with that of Barclays Capital. In a research note released on Wednesday, Barclays Capital said depressed business and consumer confidence levels, political and policy uncertainty, continued risk aversion and a bleak outlook for the global economy in the first half are likely to weigh on South Africa's growth performance for most of the year.
Industries expected to be among the worst performers over 2009 include mining and construction, said Hart.
On Tuesday, data from the Cement and Concrete Institute showed regional cement sales were down 3.9% at 14.7 million tonnes in 2008 when compared to 2007.
"The construction sector will continue to struggle because there are a lot of project cancellations, but will recover late in the year," said Hart.
Retail trade in recession
Figures from Statistics SA show retail trade sales have dropped for six consecutive months in real terms, with the sector officially entering a recession (that is, two consecutive quarters of negative growth) in November 2008.
Sales figures released by automobile manufacturers' association Naamsa show sales of new vehicles dropped by 21% in 2008. Domestic sales dropped by more than 140 000 units in 2008 when compared with 2007, with 533 000 units sold in 2008.
"Motor vehicle sales will start to emerge from the recessionary conditions they are in now and credit retail will start to recover in the second half of 2009," said Hart.
In the manufacturing industry, the Purchasing Managers Index compiled by the Bureau for Economic Research at the University of Stellenbosch dropped by 6.7% from 46.2% in October to 39.5% in November 2008. This indicates that the sector is in recession.
Hart said the agricultural sector looks set to do well in 2009: "Farmers are busy planting their crops now, with harvest expected in the second half through to next year."
The electricity and telecommunications sectors will also put in a good showing as new power stations are being built. The introduction of new broadband data capacity will provide additional investment into the country, he said.
- Fin24.com