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Johannesburg – In January the manufacturing sector in most provinces showed a slight revival, but there is still great volatility.
The Sake24 and BoE Private Clients’ Gauteng Barometer's manufacturing index rose 24% year-on-year (y/y) in January and the indices for the Free State, Western Cape and KwaZulu-Natal 2.6%, 2.7% and 2.5% respectively.
The Eastern Cape index, where motor manufacturing comprises 46% of the manufacturing sector, contracted 2.6% y/y.
Economists.co.za economist Mike Schüssler, who compiled the provincial barometers, said the manufacturing sector is growing and doing fairly well, but is generally “schizophrenic”.
Some parts are doing very well, and others are still struggling.
There is a large global demand for metals, metal products and machinery and these sectors are doing well, said Schüssler. But he expects that that they can come under pressure because of the power shortage.
Hamstrung by eurozone woes
Motor manufacturing in the Eastern Cape has in recent months been hamstrung by the debt crisis in Europe, one of its key export markets, as well as the political troubles in the Middle East.
In the Western Cape the manufacture of food in particular, petroleum products, metal, wood and paper gave the sector a boost, while KwaZulu-Natal also showed improvement in the manufacture of petroleum and metal products as well as vehicles.
Schüssler said much of the manufacturing activity in Gauteng is in heavy industry – ferrometals make up 31%. Although this index has risen, it could come under pressure, he believed.
The slight growth in the manufacturing sector is also reflected in the January purchasing managers' index. The overall increase is further in line with figures released last week by the Manufacturing Circle, a group of South Africa's foremost manufacturing companies.
Although the manufacturing sector grew in the fourth quarter of last year, the Manufacturing Circle warned that the crisis in Europe and the strong rand continue to put the sector under pressure.
The Sake24 and BoE Private Clients’ Gauteng Barometer's manufacturing index rose 24% year-on-year (y/y) in January and the indices for the Free State, Western Cape and KwaZulu-Natal 2.6%, 2.7% and 2.5% respectively.
The Eastern Cape index, where motor manufacturing comprises 46% of the manufacturing sector, contracted 2.6% y/y.
Economists.co.za economist Mike Schüssler, who compiled the provincial barometers, said the manufacturing sector is growing and doing fairly well, but is generally “schizophrenic”.
Some parts are doing very well, and others are still struggling.
There is a large global demand for metals, metal products and machinery and these sectors are doing well, said Schüssler. But he expects that that they can come under pressure because of the power shortage.
Hamstrung by eurozone woes
Motor manufacturing in the Eastern Cape has in recent months been hamstrung by the debt crisis in Europe, one of its key export markets, as well as the political troubles in the Middle East.
In the Western Cape the manufacture of food in particular, petroleum products, metal, wood and paper gave the sector a boost, while KwaZulu-Natal also showed improvement in the manufacture of petroleum and metal products as well as vehicles.
Schüssler said much of the manufacturing activity in Gauteng is in heavy industry – ferrometals make up 31%. Although this index has risen, it could come under pressure, he believed.
The slight growth in the manufacturing sector is also reflected in the January purchasing managers' index. The overall increase is further in line with figures released last week by the Manufacturing Circle, a group of South Africa's foremost manufacturing companies.
Although the manufacturing sector grew in the fourth quarter of last year, the Manufacturing Circle warned that the crisis in Europe and the strong rand continue to put the sector under pressure.
