Manufacturing contracts for third month in August

10th October 2019

By: Bloomberg

  

Font size: - +

South African factory output shrank for a third straight month in August.

Manufacturing production declined 1.8% from a year earlier, compared with a revised 0.7% drop in July, Pretoria-based Statistics South Africa said Thursday in a report on its website. The median estimate of 11 economists in a Bloomberg survey was for a 2.5% contraction. Output increased 1.3% in the month.

The drop in output exacerbates a poor start to the third quarter for an economy that managed to dodge a second recession in consecutive years after it expanded an annualized 3.1% in the three months through June.

A gauge measuring sentiment in South Africa’s manufacturing industry fell to the lowest level in more than a decade in September. It will probably get worse after the measure tracking expected business conditions in six months’ time declined for a fourth month, according to Absa Group’s Purchasing Managers’ Index.

Manufacturing accounts for about 14% of gross domestic product and output is very sensitive to power-supply constraints. While Eskom Holdings hasn’t implemented large-scale blackouts since the first quarter, a member of the utility’s board, Nelisiwe Magubane, has warned that an uptick in economic growth could lead to a new round of power cuts as Eskom won’t be able to respond to an increase in demand for electricity.

The largest declines were in the iron and steel, non-ferrous metal products and machinery sectors.

South Africa’s economy is stuck in its longest downward cycle since 1945, with business confidence at the lowest level in more than three decades.

Edited by Bloomberg

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION