Annual South African manufacturing output growth accelerated to 2.5% in January
from December’s figure, which was revised down to 1.8% from the 2% Statistics
SA originally published.
This was less than Bloomberg economists’ predictions, whose consensus was 2.8%
growth, but matched Investec’s forecast.
The boost came from food and beverages, which grew 10.1%, contributing 2.5
percentage points to the total; basic iron and steel, nonferrous metal
products, metal products and machinery, which grew 4.3%, contributing 0.8 of a
percentage point; and motor vehicles, parts, and accessories and other
transport equipment, which grew 5.5%, contributing 0.3 of a percentage point,
Stats SA reported.
Investec economist Laura Hodes said: “Production was supported by
the continued pick-up in global economic activity and trade, which is aiding
export-orientated local manufacturers. Moreover, advance indications provided
by the manufacturing purchasing managers indices have also suggested a
strengthening in domestic demand.”
FNB economist Mamello Matikinca expected a mild recovery for the sector in 2018
as domestic demand gradually increased.
Seasonally adjusted manufacturing production decreased 1.6% in January compared
with December. This followed month-on-month increases of 1.1% in December and
1.2% in November.
Seasonally adjusted manufacturing production increased 1.8% in the three months
ended January compared with the previous three months, with eight of the 10
manufacturing divisions reporting positive growth rates over this period.
The Absa purchasing managers index (PMI) rose to its best reading in nine
months in January as business activity recovered and new sales orders
increased. The index, which gauges manufacturing activity, rose to 49.9 in
January from 44.9 in December.