ANALYSISBy Ed Stoddard
The contrast between the two sectors that should be linked throws into sharp relief the economy’s failure to live up to its potential.
South Africa’s mining sector has rebounded so strongly that it is the only sector of note that has surpassed pre-pandemic levels of output. The construction sector, by contrast, remains deeply depressed. In a proper investment environment, the former would be pulling up the latter.
This juxtaposition was laid out on Tuesday in the South African Reserve Bank’s (Sarb’s) latest Quarterly Bulletin, which covers the first three months of this year.
“Mining activity has now surpassed pre-lockdown levels, aided by the lifting of lockdown restrictions and the continued recovery in global economic activity, which boosted the demand for, and the prices of, mining commodities amid global shortages,” the bulletin said.
The mining sector has certainly been shooting the lights out this year as the prices of key commodities, such as palladium, rhodium and iron ore, have hit record highs amid shortages and expectations of massive infrastructure spending in key economies such as the US and China. Off a low base, mining output soared by 116.5% year on year in April.
Profits have surged, in some cases to record…