Manufacturing production increased by 0.2% year-on-year in February, but seasonally adjusted manufacturing production decreased by 1.1% month-on-month.
The largest positive contributions were made by food and beverages, which increased by 4.2% and contributed 0.9 of a percentage point to manufacturing growth; and basic iron and steel, nonferrous metal products, metal products and machinery, which increased by 3.9% and contributed 0.8 percentage points to the overall figure.
The largest negative contributions were made by motor vehicles, parts and accessories and other transport equipment, which decreased by 7.1%, contributing -0.8 percentage points to the overall figure; and petroleum, chemical products, rubber and plastic products, which fell by 2.6% and contributed -0.6 percentage points to manufacturing production.
Further, seasonally adjusted manufacturing production increased by 3.8% in the three months ended February 2022, compared with the previous three months. Nine of the ten manufacturing divisions reported positive growth rates over this period.
The largest positive contributions over these three months were made by petroleum, chemical products, rubber and plastic products, increasing 4.9% and contributing 1 percentage point, and basic iron and steel, nonferrous metal products, metal products and machinery, growing by 5.2% and contributing 1 percentage point to the overall number.
Further, food and beverages also contributed, increasing by 3% and contributing 0.7 percentage points, and motor vehicles, parts and accessories and other transport equipment, which increased by 7% and contributed 0.6 percentage points to overall sector production.
Meanwhile, Statistics South Africa (StatsSA) showed that seasonally adjusted manufacturing sales decreased by 0.1% month-on-month in February. This followed month-on-month improvements of 4% in January and 2.1% in December 2021.
“Seasonally adjusted manufacturing sales increased by 8.3% in the three months ended February, compared with the previous three months.
“The largest contributions were made by motor vehicles, parts and accessories and other transport equipment, increasing 26% and contributing 2.9 percentage points, basic iron and steel, non-ferrous metal products, metal products and machinery, which grew 9.3% over the three months and contributed 2.3 percentage points, and petroleum, chemical products, rubber and plastic products, which grew 8.5% and contributed 1.6 percentage points to overall production,” StatsSA said.
RECOVERY CHALLENGE
“The manufacturing production growth rate reflects the challenging path towards the recovery of the sector, as the trend points downwards, eroding the hope we had from the previous month data,” commented business consultancy Don Consultancy Group (DCG) chief economist Chifi Mhango.
The StatsSA data reflects manufacturing production increasing by a marginal 0.2% in February compared with February 2021. The data also reflects seasonally adjusted manufacturing production decline of 1.1% in February 2022 compared with the previous month, he said.
Total unadjusted manufacturing sales increased by 11% year-on-year in February to reach R220.8-billion, down from a high of 13.9% year-on-year in January, he said.
Basic iron and steel, non-ferrous metal products, metal products and machinery dominated the current monthly sales at R55.8-billion followed by food and beverages at R51.5-billion, he noted.
“The need for a conducive environment to be created for the manufacturing sector to attract the much-needed investment in South Africa, as latest [gross domestic product] sector data continues to reflect de-industrialisation as rising electricity costs and its unreliable supply patterns of electricity, increasing and uncompetitive logistical costs, unstable nature of the labour environment coupled with rising imports of finished goods into the South African economy dominate the industrial production landscape,” Mhango highlighted.
“Further, the latest Quarterly Labour Force Survey also shows massive job-shedding in the manufacturing sector, with a decrease of 85 000 in the fourth quarter of 2022 from the previous quarter, which is very concerning, and, therefore, speedy implementation of various Industry Master Plans by the South African government remains imperative,” he said.
The picture of the global manufacturing landscape is mixed amid the war in Ukraine, which is affecting global supply chains.
“Manufacturing production in the US increased by 7.4% year-on-year in February, the largest annual increase since July 2021, while latest data from Euro zone shows a decline of 1.7%, while some Brazil, Russia, India, China and South Africa countries, such as Brazil, registered a decline of 4.8%.
“India’s latest manufacturing data, meanwhile, reflects a marginal increase of 1.1% year-on-year, mainly attributed to increased production of wearing apparel, computer, electronic and optical products as well as furniture products,” Mhango said.