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South Africa’s manufacturing production increased by 3.8% year-on-year, owing largely to a 8.2% increase in the food and beverages sector, which contributed 1.9 percentage points, Statistic South Africa said on Tuesday.
The manufacturing of petroleum, chemical products, rubber and plastic products contributed 5.5% and 1.2 percentage points, while manufacturing production in the motor vehicles, parts and accessories sector grew by 13.3%. It also contributed one percentage point.
However, compared with the last quarter of 2014, manufacturing production contracted 0.6%, as six of the country’s ten manufacturing divisions reported negative growth rates over this period.
Ironically, petroleum, chemical products, rubber and plastic products shrunk by 2.6%, while the country’s media sector also produced less –radio, television and communication apparatus and professional equipment was down 22% and wood and wood products, paper, publishing and printing declined 2.8%.
“Despite a firmer end to the quarter for local manufacturing activity, the negative underlying momentum growth in production continues to point to an industry under pressure,” financial services company BNP Paribas economist Jeffrey Schultz said in a statement.
He added that this was backed by the deterioration of the purchasing managers index of late as well as in the slowdown in smoothed manufactured export growth.
“The latter has yet to reap the full benefits from the sharp fall in the currency over the past two years – despite the strong negative correlation between the trade-weighted rand and manufactured exports,” Schultz noted.
Further, structural constraints to growth in the economy – “the most obvious being electricity supply” – were likely to continue to hamper growth, activity, investment, employment and demand in this space until such time as these bottlenecks were addressed.