South African July manufacturing production up 5.6% y/y vs -0.5% in June

Manufacturing production rose sharply in July, but data show this was mainly supported by lower base effects created during a strike by steel and engineering workers last year rather than strong increases in actual output...

Higher output by the basic iron and steel, metal products, and machinery; and the motor vehicles, parts and accessories manufacturing divisions was thus unsurprisingly the main reason behind the 5.6% year-on-year increase in manufacturing production. Output fell by 0.5% year on year in June.

A better indication of manufacturing output was the slowdown in the monthly data, which show that manufacturing production on a seasonally adjusted basis only rose by 0.3% in July, after increasing by 0.8% in June. Load shedding continued in July, although not severely.

Seasonally adjusted manufacturing production decreased by 1.3% in the three months ended July compared with the previous three months, with six of the ten manufacturing divisions reporting retractions over the period.

Weak demand and lower commodity prices are negatively affecting production in the sector.

Seasonally adjusted manufacturing sales increased by 0.4% in July compared with June after remaining unchanged in June 2015 and rising 2.4% in May.

Source: BDpro