The utilisation of production capacity by large manufacturers in South Africa declined to 80.2% in February from 80.6% a year earlier, data from Statistics South Africa showed.
Compared to November 2014, the decline was more pronounced – by 2.5pp, adding to concerns that the manufacturing sector has shrunk again in Q1 after rebounding to a 9.5% q/q growth in Q4 2014 following three consecutive quarters of contraction affected by strikes.
The 0.4pp y/y increase in under-utilisation can mainly be attributed to an increase in ‘other reasons’, such as downtime due to maintenance and changes in productivity (contribution of 0.3pp), Stats SA said. Shortage of raw materials and insufficient demand contributed 0.1pp each, while shortage of labour contributed -0.1pp. The ongoing electricity supply shortages were likely an important factor for the capacity constraints experienced by the manufacturing industry.
According to previously released data, South Africa’s manufacturing output contracted by 0.5% y/y in February.
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