Electricity produced in South Africa fell by 0.2% year-on-year in March to levels last seen in 2005, following a trend that has seen electricity production consistently contract on a yearly basis since early 2014, private bank Investec has found.

Investec economist Annabel Bishop said this week that the one-quarter lag between electricity produced and real gross domestic product, along with the readings of the South African Reserve Bank’s (Sarb’s) leading indicator, implies that the country’s economic growth likely slowed in the first quarter of this year from the 4.1% quarter-on-quarter growth achieved in the first three months of last year.

“South Africa is not able to consistently supply its full capacity of 42 300 MW owing to the need to conduct both routine and breakdown maintenance, but demand for electricity is high, and has been rising since 1994 owing to economic growth of 3% a year,” she reiterated.

Meanwhile, activity confidence surveys for the first quarter showed a mixed picture, with manufacturing falling, retail rising modestly and building activity slowing.

With economic growth likely weakening over the first quarter and remaining potentially weak in the second half of the year owing to the difficulties faced by the industrial sector, Bishop said it was “inadvisable” for the Sarb to hike interest rates this year.

“The interest-rate-sensitive services sector will be the main source of growth in 2015,” she asserted.