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Mining, manufacturing output slows

Johannesburg - South Africa's mining production shrank by 10.1% in the year to August, led by the volatile platinum industry which is recovering from a long strike, official figures showed on Thursday.

The largest negative growth rates were recorded for platinum group metals (PGMs), -45%, diamonds, -30.2%, and other non-metallic minerals, -24.1%.

The main contributors to the 10.1 decrease were PGMs, which contributed -11.6 percentage points, and gold which contributed -1.1 percentage points.

Seasonally adjusted mining production decreased by 3.1% in August 2014 compared with July 2014.

This followed month-on-month changes of 1.6% in July 2014 and -1.1% in June 2014.

Seasonally adjusted mining production decreased by 1.1% in the three months ended August 2014 compared with the previous three months.

The main contributor to the decrease were PGMs, contributing -1.6 percentage points.

Iron ore was a significant positive contributor, contributing one percentage point.

Nedbank said on Thursday that the decrease in production illustrated that the industry was suffering from the effects of the five-month-long platinum strike earlier this year.

"While the impact of the strike will abate as the year progresses, activity is likely to remain lacklustre partly as a result of the seasonal decline related to the December holidays," it said in a statement.

"Mining figures are volatile and have little influence on policy decisions in the short term, but the persistent weakness will continue to hurt GDP [gross domestic product] growth."

South Africa's platinum mining sector was rocked this year by a five-month wage strike at three top producing firms. The stoppages at Anglo American Platinum [JSE:AMS], Impala Platinum [JSE:IMP] and Lonmin [JSE:LON] in the Rustenburg platinum belt slashed profits.

The strike ended in June with the signing of a three-year wage deal.

Figures by Statistics South Africa also revealed that the country's manufacturing production for August declined by 1.2%.

The decrease was mainly due to lower production in wood and wood products, paper, publishing and printing (-11.3% and contributing 1.1 percentage points) and petroleum, chemical products, rubber and plastic products (-3.9% and contributing -0.9 of a percentage point).

There was also lower production in glass and non-metallic mineral products (-13.4% and contributing -0.6 of a percentage point), basic iron and steel, non-ferrous metal products, metal products and machinery (-3.1% and contributing -0.6 of a percentage point); and food and beverages (-2.0% and contributing -0.5 of a percentage point).

The motor vehicles, parts and accessories and other transport equipment division was a significant positive contributor (31.7% and contributing 2.3 percentage points).

Seasonally adjusted manufacturing production decreased by 1.4 percent in the three months ended August 2014 compared with the previous three months.

Eight of the 10 manufacturing divisions reported negative growth rates over this period.

The largest negative contribution to the decrease of 1.4% was made by the basic iron and steel, non-ferrous metal products, metal products and machinery division (-5.0% and contributing -1.0 percentage point).

Nedbank said in a statement on Thursday that the performance of the manufacturing sector would "remain lacklustre in the months ahead".

"While output growth could be boosted by base effects, improving global demand and a weaker rand, this will be offset by weak domestic demand," it said.

"Underlying local economic conditions remain weak."

  - AFP, Sapa

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