According to the latest Stats SA GDP publication, South Africa’s GDP contracted to 0.2% (R4.62trillion) in the third quarter of 2023 (2023Q3), down from 0.5% (R4.63 trillion) in the second quarter of 2023 (2023Q2). This comes as GDP growth for 2023Q2 has been revised down from an estimate of 0.6% to 0.5% in2023Q3.
The contraction in GDP for 2023Q3 was influenced by the agriculture sector, which contributed to the decline by -0.3 percentage points, followed by manufacturing (-0.1), and construction (-0.1). Mining and trade had a neutral impact on the overall GDP contraction.
Despite this contraction, GDP increased in nominal terms for the three consecutive quarters. The 2023Q3 GDP is 0.4% above 2020Q1 GDP (before the onset of COVID-19 pandemic).This indicates a modest growth trajectory over the two-year period.
However, if the country is to achieve sustained growth in the coming years, it will need to implement targeted interventions in sectors with growth potential while addressing obstacles hindering growth.
S&P Global Market Intelligence projected a contraction of 0.1% in Durban’s GDP for the third quarter of 2023 (2023Q3). This decline comes after two consecutive increases. The following four sectors contributed to negative growth: manufacturing,-0.19 percentage points followed by agriculture (-0.13), construction (-0.08),and trade (-0.01).
Despite these losses, the city’s GDP remains 0.04% better compared to the same period in 2022. Year-on-year levels of GDP measured by production increased by R177million. When compared to other major metros year-on-year, Durban shows improved performance and reported the second-highest increase in GDP, with growth of 0.04%. Leading was the City of Johannesburg, with a 0.05% increase, and Ekurhuleni, with an increase of 0.01%. By contrast, the City of Cape Town experienced a decrease of 0.10%, and Tshwane, a substantial decline of 0.62%.
The investment of overR370 million in eThekwini’s small, medium and micro enterprises (SMMEs),primarily through the Durban Business Fair, has made a significant contribution to the local economy. The Fair has facilitated the growth and exposure of local businesses since 1998, attracting over 100,000 participants and 21,000 visitors. It has also helped create sustainable jobs, with more than 20,000 generated. The success stories of individual entrepreneurs illustrate the impact of this investment. Some of the entrepreneurs that participated at the Durban Business Fair have expanded their businesses, employed numerous individuals, and even branched out internationally, showcasing the fair’s role in fostering business growth and economic development within eThekwini (eThekwini Municipality,2023).
Itis easy to think Durban’s best years are behind it – but it is not. Yes, high land costs and increasing rates and taxes have slowed new property development, with some developers opting out or adopting a cautious stance. However, Swindon Property notes that Durban still presents valuable opportunities for patient investors (Business Live, 2023).
The city is undergoing a massive transformation with several multi-billion-rand catalytic projects underway. These are aimed at boosting the local economy, creating jobs, and enhancing the city’s infrastructure and are a testament to the eThekwini Municipality’s commitment to growth and development in the region(eThekwini Municipality, 2023).
Shongweni Development: A project in Outer West eThekwini, featuring a mix of lifestyle, tourism, office, and logistics facilities. The R8 billion investment will be rolled out from 2021 to 2030, creating 8,500 jobs.
Cato Ridge Freight and Logistics: A R18 billion project set to run from 2021 to 2026, creating10,000 jobs. It’s focused on logistics and includes a mega truck stop and other facilities.
Avoca Nodal Development: The project, on the N2 corridor, runs from 2021 to 2035 with a R10.1 billion investment. It includes industrial and residential areas, expected to create 51,500 jobs and generate significant revenue.
Cornubia: A key project of eThekwini, Cornubia is a large-scale, mixed-use area aimed at providing housing and business opportunities. With a R25.8 billion investment from 2012 to 2030,it will create 53,000 jobs and house 40,000 people.
Underperformance in certain sectors caused the National GDP to dip in 2023Q3. But for the year ,GDP has been on the rise, reflecting a steady recovery from pre-pandemic levels. This underscores the need for targeted policy measures to ensure long-term economic growth. In Durban, GDP contracted in the third quarter, nonetheless, the city reported a year-on-year GDP increase of 0.4%, outperforming all major metros except Johannesburg. This illustrates Durban’s resilience and potential for continued economic progress in the face of national and global economic difficulties.
The municipality's significant investment in SMMEs, particularly through the Durban Business Fair, has proven to be a vital catalyst in stimulating local economic growth and job creation. The Fair's impact on nurturing entrepreneurs and expanding local businesses is a clear indication of eThekwini's potential to evolve and thrive despite economic challenges. Moreover, the city's commitment to development is further underscored by the initiation of several multi-billion-rand catalytic projects.
Despite the headwinds of economic transition and challenges in traditional revenue streams, the city is poised for a renaissance through strategic investments and large-scale developmental projects, underscoring eThekwini Municipality’s dedication to a prosperous and sustainable future.
1. Business Live. (2023). KZN industrial property prices surge as demand exceeds supply. Available at: https://www.businesslive.co.za/bd/companies/property/2023- 07-18-kzn-industrial-property-prices-surge-as-demand-exceeds-supply/
2. Eskom. (2023). Weekly System Status Report 2023 w28. Available at: https://www.eskom.co.za/wpcontent/uploads/2023/07/Weekly_System_Status_Report_2023_w28.pdf
3. eThekwini Municipality. 2023. Durban Business Fair: Celebrating 25 years of empowering SMMEs. Available at: https://www.durban.gov.za/news/Durban+Business+Fair%3A+Celebrating+25+years+of+empowering+SMMEs.
4. eThekwini Municipality. (2023). Catalytic Projects: Projects in implementation/complete the next 5 years. Available at: https://www.durban.gov.za/pages/business/catalytic-projects
5. Standard & Poor's Global Market Intelligence database. (2023).
6. Statistics South Africa. (2023). Gross domestic product survey. Available at: https://www.statssa.gov.za/publications/P0441/P04412ndQuarter2023.pdf
