Johannesburg - Growth in South Africa’s manufacturing output outpaced expectations in February,
adding to signs that domestic demand is recovering and backing the case for
higher interest rates.
Factory output grew by 4.1% year-on-year in volume terms in
February from a revised 2.3% in January, Statistics South Africa said on
Wednesday. Economists in a Reuters survey expected growth of 2.0%.
On a month-on-month basis, production in volume terms grew by a
seasonally adjusted 2.8%. It expanded 1.6% in the three months to
February compared with the previous three months.
The manufacturing sector contributes about 15% of gross
domestic product and is a major creator of jobs for the largely unskilled labour
force in the country where unemployment has languished for years at around 20 to
25%.
“It’s a really good number, especially since the manufacturing
numbers have had trouble building up steam,” Efficient Group economist Merina
Willemse said.
“It shows a promising growth in this industry, supporting perhaps a
more optimistic economic figure.”
The Reserve Bank has left its repo rate unchanged at 5.5% in
the last 16 months to aid economic recovery after a recession in 2009, but some
analysts say monetary tightening could resume at the end of the year to curb
inflation.
The rand was firmer at R7.9633/$ from R7.9840 before the
manufacturing data was released.
The yield on the 2015 bond dipped to 6.75% from 6.76%
prior, while that for the 14-year bond was unchanged at 8.5%.
South Africa plans to spend R5.8bn over the
next three years to help manufacturers affected by the global economic downturn
upgrade their factories, improve products and train workers, the trade minister
said this month.