As economic growth in South Africa slowed to under 1%, container movements into and out of South Africa declined in the third quarter.

Jonathan Horn, Country Managing Director for shipping group Maersk Line South Africa says, “A significant factor counting against SA is the slowdown in its biggest trading partner, China, which has been experiencing slower economic growth for the past three years as well as a sluggish economic recovery being experienced in Europe and the US. Approximately 40% of SA’s exports are destined for China, and that’s weighed significantly in favour of raw minerals, metals and wood products.”

Horn states the company’s volume performance in Southern Africa for 2014 is expected to be in line with the market which, as at the end of Quarter 3, is a decline of around 3%. This is likely to improve marginally in the fourth quarter as a slight improvement in import volume pre the festive season is being experienced by the industry. Maersk Line also expects demand in South Africa to be fairly flat in the first half of 2015, increasing moderately in the second half of 2015 and beyond. The company will continue to benefit from the operational efficiencies put in place throughout the global network in recent years.

In the short term, the export market in South Africa, which has a large commodity base, is being affected as much as the import market, despite expectations that the Rand’s weakness would boost export demand.

Overall container imports in Africa grew by some 3% year-on-year in the second quarter, but imports into South Africa declined. However, the third quarter is seeing import market growth and trending in a positive direction.

According to Statistics South Africa, the country’s GDP grew by 0.6% in the second quarter of 2014, after contracting by a similar percentage in the second quarter. Economic growth in the first two quarters of the year was significantly impacted by the five-month-long strike in the platinum sector, and the country is still experiencing the after-effects of this.

The marginal growth in the second quarter nevertheless satisfied market expectations that, South Africa, would not be affected by a technical recession. It is, however, important to note that while growth was experienced in the agriculture and construction sectors, the same was not true in the mining and manufacturing sectors, which have both contracted.

The rest of Africa, meanwhile, experienced growing container movements in the period. Imports into the continent rose around 3%.
Moving into the last quarter of 2014 and the first quarter of 2015, further increase in exports is expected from Africa as a consequence of positive drag from more developed markets.

While there is a moderate recovery in commodity demand from China, which is good news, the South African commodity export market remains vulnerable across a number of important areas.

The rest of the year will see a steady uptick in exports in the 2% – 4% range owing to international demand and stabilised supply. The company estimates that mineral commodities will make up about 35% – 40% of the total South African exports in 2014.