JOHANNESBURG – South Africa’s manufacturing and mining output fell in December, data showed on Thursday, but a recovery is anticipated this year as business confidence covers and commodity prices rise.
Africa’s most industrialised economy is struggling to attract investment, with sentiment dimmed by political uncertainty, weak growth that’s got hit consumer activity, together with the looming threat of credit downgrades to junk.
Manufacturing output fell by 2% year-on-year in December after expanding by 2% in November, Statistics South Africa said.
Economists polled by Reuters had forecast manufacturing volumes would remain steady at 0.0% year-on-year in December.
On a month-on-month basis, factory production rose 0.3% and edged down 1.1% inside 3 months to December in comparison to the first 3 months.
“One can find signs which the manufacturing sector sometimes have strengthened a bit of at the beginning of in 2010,” Capital Economics Senior Emerging Markets Economist William Jackson wrote inside of a note.
“Even though the relationship relating to the manufacturing PMI as well as output data has converted a little before two years, the advance in January’s PMI does indicate faster growth. The South African Chamber of Commerce and Industry’s way of business confidence tells a comparable story.”
Activity in South Africa’s private sector remained in growth territory in January, while business confidence rose inside the first month of year, data indicates.
Mining output fell 1.9% year-on-year in December after falling 4.5% the last month, Stats SA said.
“Inspite of the still weak December mining production figures, the performance of mining production ought to be held by the forecasted lift in commodity prices in 2017,” Nedbank said within a note.
