While production in the manufacturing sector continued to expand in November, the rate of growth slowed to 0.3% from 1.7% in October, with 0.6% of this growth attributed to greater vehicle output, Statistics South Africa (StatsSA) reported on Thursday.

Responding to StatsSA’s preliminary manufacturing production and sales release for November, Investec stated that the 7.2% growth in vehicle production in November – up from 5.6% in October – could be ascribed to a further recovery in vehicle production following the disruptions caused by industrial action that persisted from the end of August through to the first week of October.

The bank further noted that attempts to recover lost production suggested that vehicle production growth would likely remain relatively buoyant into the first quarter of the year.

Positive contributions, of a combined 0.6%, also stemmed from increased production in the food and beverage and glass and nonmetallic mineral manufacturing subsectors, it added.

“However, the growth contractions in the petroleum and basic iron subsectors detracted 1% from headline growth,” Investec noted.

Seasonally adjusted manufacturing production for the three months ended November decreased by 1% compared with the previous three months, with six of the ten manufacturing divisions reporting negative growth rates over this period.

The largest negative contributions to the decrease were made by the motor vehicles, parts and accessories and other transport equipment division, detracting 13.4% from headline growth, and the basic iron and steel, nonferrous metal products, metal products and machinery division, which decreased overall growth by 2.8%.

Meanwhile, the seasonally adjusted sales of manufactured products for the three months increased by 0.1%, or R390-million, compared with the prior three months.

The manufacturing divisions largely responsible for the increase in total manufacturing sales were petroleum, chemical products, rubber and plastic products, which contributed 2.7%, or R2.8-billion, and the food and beverages division, which lifted sales by 1.3%, or R1.2-billion.

In contrast, the motor vehicles, parts and accessories and other transport equipment division narrowed sales for the three months by 10%, or R4.8-billion.

Investec held that, in the near term, forward-looking indicators, namely the purchasing managers index surveys, suggested that the expansion in manufacturing production would be maintained, but at a moderate rate.

The manufacturing production data would likely have little bearing on the Monetary Policy Committee decision later this month, as the South African Reserve Bank (Sarb) continued to balance weak economic growth prospects against the upside risks to inflation.

“Interest rates are expected to remain on hold throughout 2014 and the currency will remain a key consideration for Sarb, owing to the risks of the pass through of the weaker currency to other prices,” Investec commented.