Aug 07, 2014
Manufacturing up 0.5% in June, reflects negative strike impactBack
Engineering|Africa|Nedbank|Stats SA|Africa|South Africa|Beverage Production|Chemical Products|Equipment|Food|Gross Domestic Product|Manufacturing|Manufacturing Division|Manufacturing Figures|Manufacturing Sectors|Nonmetallic Mineral Products|Plastic Products|Product|Products|Rubber|Steel|Transport Equipment|Yearly Manufacturing Production
© Reuse this
Statistics South Africa (Stats SA) said that the 0.5% year-on-year increase was mainly driven by higher production in the petroleum, chemical products, rubber and plastic products segment, which was up 3.9%, contributing 0.9 of a percentage point, while food and beverage production increased 3.2% and added 0.7 of a percentage point.
The motor vehicles, parts and accessories and other transport equipment division was a significant negative contributor, having declined 11.3%, subtracting 1.1 percentage points.
Meanwhile, on a seasonally adjusted basis, manufacturing production was up by 1.4% month-on-month but down 0.4% quarter-on-quarter in the second quarter of 2014, Stats SA revealed.
The quarterly decline was a result of lower production in the motor vehicles, parts and accessories and other transport equipment, as well as the petroleum, chemical products, rubber and plastic products categories, which declined by 6.1% and 1.7% respectively.
Of the ten manufacturing sectors, six recorded declines on a quarterly basis.
Nedbank said the improved June manufacturing figures supported its forecast of a modest 1.4% annualised expansion in gross domestic product during the second quarter of the year, following the 0.6% contraction of the first quarter.
“However, despite this, the production side of the economy remains weak. Unfortunately, inflation has been above the Reserve Bank’s 6% upper target since March this year and is likely to remain above 6% well into next year. The Monetary Policy Committee (MPC) will have to balance these two factors when deciding on interest rates.
“The bank has reiterated that interest rates are in a rising cycle and that, at some point, they will have to be ‘normalised’. The implication is that the bank will continue to talk tough but to act as moderately as possible given the weak economy.
“The MPC will therefore probably pause in September before hiking by another 0.25 percentage points in November,” Nedbank statd.
It added that, from the Kagiso Purchasing Managers’ Index (PMI) numbers, it seemed as if July manufacturing production growth would still remain lackluster as the PMI figure came in at 45.9 for July from 46.6 in June.
“The Kagiso PMI numbers have been below the 50-point mark that separates expansion from contraction in the manufacturing sector for four consecutive months, which does not bode well for the sector,” Nedbank said, adding that the domestic climate could, however, be mitigated by increased production stemming from the weaker rand boosting exports and production.
Edited by: Chanel de Bruyn© Reuse this Comment Guidelines (150 word limit)
Updated 16 minutes ago Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Recent Research Reports
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
This Week's Magazine
Projected capital expenditure (capex) in the South African automotive assembly industry should reach a record R7.48-billion this year, says the National Association of Automobile Manufacturers of South Africa (Naamsa) in its 2014 fourth quarter business review. Capex...
After several years of navigating project-threatening red tape and currency fluctuations, the 4.4 MW Bronkhorstspruit biogas power plant, which will supply clean energy to a leading automotive manufacturer in Gauteng, is expected to enter production before June....
South African paper and pulp producer Sappi reported earlier this month that it would build a pilot plant for the production of low-cost Cellulose NanoFibrils, or CNF (nanocellulose) at the Brightlands Chemelot Campus in Sittard-Geleen in the Netherlands.
The long-term outlook for Nigeria is a country that has the potential to be very strong. So affirmed International Monetary Fund (IMF) Nigeria Mission Chief and Senior Resident Representative Dr Gene Leon on recently. "But we are starting from a point of huge...
Poor infrastructure planning and inadequate maintenance are becoming increasingly problematic for new developments and the associated infrastructure required to support such developments. In many urban and rural municipalities, the state of infrastructure has been...