With business activity still under pressure, Stats SA reports that manufacturing production fell for the third consecutive month. Output declined by 0.4% in June 2015 compared with June 2014, this after falling by 1.6% in May.
The main contributors to June’s 0.4% drop are lower production in petroleum, chemical products, rubber and plastic products; as well as basic iron and steel, non-ferrous metal products, metal products and machinery.
Dennis de Jong, MD of UFX.com commented that these figures are being closely watched by observers wanting to see the impact of China’s slowdown on the sector.
“A weaker rand should help stimulate exports going forward, but the impending US interest rate rise, combined with a drastic scaling back of Chinese activity, will give Finance Minister Nhlanhla Nene and co. food for thought. It will certainly be a difficult few months ahead for the South African manufacturing industry, but we won’t know precisely how difficult until the figures for July and August are released.”
Seasonally adjusted manufacturing production decreased by 1.2% in the second quarter 2015 compared with the first quarter of 2015. Six of the ten manufacturing divisions reported negative growth rates over this period.
By Jenni McCann