The South African economy could only manage to grow by a mere 0,7% in the past two years. This, according to the trade union Solidarity, is light years removed from the government's target of 7% annual growth and shows that growth has not nearly reached the level necessary to significantly affect unemployment. Therefore, job creation will continue at a snail's pace, the trade union warned today.

Solidarity's reaction comes after Statistics South Africa today released the latest gross domestic product (GDP) figures for the third quarter of 2010. According to the figures, the GDP for the third quarter was 2,6%. This follows a GDP figure of 2,8% (adjusted from 3,2%) in the second quarter of this year and 4,6% in the first quarter.

The trade union emphasized that although the mining sector has made the single biggest contribution to the GDP (namely 1,5 percentage points), the sector has not been able to reach its glorious levels of 2006 and 2007 again. In addition, the sector also could not succeed in recovering to the levels recorded in the first quarter. "It is definitely positive if one considers the improved growth recorded in the mining industry in the past quarter. However, it is still clear that the mining sector is experiencing pressure. This is also reflected in the constant retrenchments in the sector, as is the case at Exxaro," explained Solidarity spokesperson Ilze Nieuwoudt.

There is still concern about the increasing slow in growth recorded in the construction sector. "This industry has now reached woefully low levels and could probably even experience negative growth in the coming quarter if the current trend continues," Nieuwoudt said. "The government must now fulfil its promises of new construction projects and ensure that the projects are tackled urgently in order to stimulate growth in the sector, while at the same time providing better infrastructure to businesses."

According to Nieuwoudt, the manufacturing sector has also come under pressure in the past quarter and the sector recorded its first negative growth since the first quarter of 2009. "The protracted strike in the motor manufacturing sector this year probably contributed significantly to the poor performance of the manufacturing sector. If this is the case, the sector could probably expect improved growth figures by the fourth quarter of 2010 already."

Statement issued by Ilze Nieuwoudt, Solidarity spokesperson, November 23 2010

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