South Africa’s mining and manufacturing output has slumped further under the weight of load-shedding.
According to the BER Weekly Review released on Monday, the latest data from Statistics SA shows that real manufacturing production slumped 5.2% year on year (y-o-y) in February, following an annual decline of 4.1% in January.
Seven out of the 10 main subsectors contracted, with the most significant drag evident in food and beverages (-6.1%), metals and machinery (-5.3%), and petrochemicals (-4.7%).
“This was foreshadowed by a worsening in the Absa PMI in February. Still, barring a very large monthly decline in March, the sector should be notably less of a drag on quarter one (Q1) GDP compared to Q4’s significant negative contribution. Indeed, the sector may even make a small positive GDP contribution in Q1,” the BER report noted.
Mining output plunged by 5% y-o-y in February in the thirteenth consecutive annual decline. The biggest drag on growth came from a fall in the production of coal (-12.6%) and diamonds (45.3%). On the upside, iron ore made a significant positive contribution (30.6%) to the annual figure.
On a monthly basis, output dropped by 4.9% after an increase of 3.3% month on month in January. Nine out of 12 mineral groups contracted on a monthly basis.
“Remarkably, despite the poor performance in February and depending on the performance in March, a solid start to the year means that the sector may still contribute positively to GDP in Q1. The monthly contractions in manufacturing and mining production were unsurprising as the country experienced seven consecutive days of stage six load-shedding in February,” the BER report said.