Despite an uptick in year-on-year manufacturing output, the outlook for the manufacturing sector remained subdued, banking group Nedbank’s economic unit said on Tuesday.

Against the market consensus of a 2.1% contraction and a 3.3% decline in September, Statistics South Africa (Stats SA) reported a 1.5% year-on-year expansion in manufacturing production during October.

Stats SA said the food and beverages, basic iron and steel, nonferrous metal products, metal products and machinery industries had contributed to the increase with a respective 3.7% and 2.5% year-on-year rise, contributing 0.8 and 0.5 of a percentage point respectively during October.

Nedbank noted that the petroleum, chemical products, rubber and plastic products and textiles, clothing, leather and footwear industries were also contributors to the increase in output during the month.

The motor vehicles, parts and accessories and other transport equipment industry, which was hit by labour strikes in September, showed a significant rebound in output, growing 6.7% and contributing 0.5 of a percentage point during the month under review.

However, on a seasonally adjusted basis, the sector was the largest negative contributor to the 2.5% decrease during the three months to October – compared with the previous three months – as the industry recorded a contraction of 30.3% and contributed -2.7 percentage points.

Seven of the ten manufacturing divisions reported seasonally adjusted negative growth rates over the three-month period.

Output expanded 6.9% on a month-on-month seasonally adjusted basis – well above the market consensus of 2%, Nedbank noted.

The banking group concluded that, moving forward, export performance would be undermined by weak global growth conditions, while softer household spending and relatively subdued fixed investment activity would undermine the performance of local-orientated industries.