Total turnover in the private sector increased by 1,6% in the quarter ended June 2015 compared with the quarter ended March 2015, according to Stats SA’s latest Quarterly financial statistics report.

The electricity, mining, trade, manufacturing and transport sectors reported increases in turnover, while decreases were recorded for construction, community services (excluding government institutions) and business services (excluding financial intermediation and insurance).

Capital expenditure on property, plant and equipment increased by 3,4% over the same period, from an estimated R85,1 billion to R88,1 billion. Capital expenditure plays an important role in determining gross fixed capital formation (which is a component of gross domestic product), planned future investments, potential economic growth, and economic confidence levels.

Increases in capital expenditure were recorded in the manufacturing, business services and mining sectors, while decreases were recorded for the electricity, trade, construction, community services and transport sectors.

Despite the quarter-on-quarter increase in total capital spending, the data for previous quarters show some reluctance on the part of private-sector enterprises to invest in capital growth, largely the result of large enterprises managing costs to maintain profitability and to build cash balances.

Positive year-on-year capital expenditure growth was mainly restricted to the electricity, manufacturing and construction sectors. Overall, capital expenditure increased by 1,0% or R858 million between the June quarter of 2014 and the June quarter of 2015.

Capital expenditure within the manufacturing sector was mainly driven by the demand for coke oven products, electric motors and generators. Demand was also driven by petroleum refiners.

The increase in the construction sector’s capital spending was mainly driven by an increase in plant, machinery, furniture, fittings and other equipment.

Capital expenditure fluctuations occurred within the electricity sector, and these can be attributed to the large construction projects of Medupi and Kusile – the power stations which are planned to increase electricity capacity.

Selected enterprises within the following subsectors also reported fluctuations in capital spending: manufacturing of furniture, telecommunications, manufacturing of transport equipment, extraction and evaporation of salt, pipeline transport, mining of coal and lignite, extraction of crude petroleum and natural gas.

During the June 2015 quarter, it was estimated that capital expenditure for larger businesses grew by 4,4% quarter-on-quarter, while medium and small businesses reflected growth of 7,0% and -8,2%, respectively.

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Stats SA’s Quarterly financial statistics survey provides financial information on private-sector enterprises in terms of income and expenditure items, inventories, capital expenditure, the carrying value of assets and selected operating financial ratios. These estimates are used by the private sector for various purposes, including that of comparative business and industry performance analyses.