South Africa’s factory output growth cools to 2.2% y/y in October

By bne IntelliNews December 9, 2014

South Africa’s manufacturing sector output expanded by 2.2% y/y in October, decelerating from a revised 8.6% growth the month before, mainly due to a higher base, preliminary data from Statistics South Africa showed.

September’s surge in output, the highest since June 2010, was attributed mainly to a 122% y/y jump in the production of the automotive sector, which was hit by industrial action a year earlier. In October, the production of motor vehicles, parts and accessories and other transport equipment rose 10.3% y/y and contributed 0.9pps to the overall output growth.

The food and beverages manufacturing industry was also a significant positive contributor to the overall y/y output increase, recording a 2.1% y/y growth and contributing 0.5pps. Next, production of petroleum, chemical products and rubber and plastic products contributed 0.4pps based on a y/y growth of 1.6%.

On a seasonally adjusted monthly comparison basis, factory output edged up 0.5% in October, braking from a 4.2% growth in September, but remaining in positive territory for the third straight month as an indication that the industry continues to recover from the disruptive strikes in the first seven months of the year.

For the three months to end-October, the manufacturing production expanded by a seasonally-adjusted 3.8% compared to the preceding three-month period, with 9 of the 10 manufacturing divisions reporting growth. It was by 3.2% higher y/y. For the first 10 months of the year, factory output was flat y/y.

The total sales of manufactured products at current prices climbed 11.7% y/y to ZAR174.5bn ($15.2bn) in October, decelerating from a 15.7% y/y growth in the previous month, Statistics South Africa said. On a seasonally adjusted basis, manufacturing sales rose 2.0% m/m in October and were by 5.4% higher in the three months to end-October as compared to the previous three-month period.

The manufacturing industry, which accounted for 13.4% of South Africa’s total economic output in Q3, contracted for the third straight quarter, with the rate of decline softening to 3.4% from 4.0% in Q2 and 6.4% in Q1. Looking at the Purchasing Managers’ Index (PMI) for the manufacturing industry, which advanced for the fourth straight month in November and reached its highest level since August 2013, a recovery in the industry seems imminent. However, it is endangered by power outages, which have put significant pressure on manufacturing production during the last three weeks, and are continuing with no resolution in sight.

Related Articles

South Africa’s MTN to invest $350mn in Iranian broadband

South Africa’s MTN said it has agreed, on a non-binding and preliminary basis, to invest an initial $350mn into Iranian fixed broadband provider Iranian Net. The investment will give ... more

South Africa receives another downgrade to junk

Fitch Ratings on April 7 downgraded South Africa to junk status following the removal of Pravin Gordhan as finance minister and the enusing political crisis. Fitch's downgrade to 'BB+' ... more

S&P downgrades South Africa's credit rating to junk after cabinet reshuffle

Standard & Poor’s ratings agency has cut South Africa's sovereign credit rating to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB', both with a negative ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss