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Johannesburg – The manufacturing sector’s production reported growth of 2.2% in October, but an economist has warned that weak growth is expected going forward.
According to data released by Statistics South Africa (Stats SA) on Tuesday, manufacturing production rebounded from a -1.7% contraction reported in September 2017.
Contributors to the higher production include food and beverages which were up 7.3% contributing 1.8 percentage points to manufacturing production. Iron and steel production also contributed to growth, up 5.8% and having contributed 1.1 percentage points to overall production.
Jason Muscat, FNB senior economic analyst noted that the manufacturing sector contracted –0.9% so far this year and expects it to negatively impact GDP for 2017.
Muscat expects the outlook for the sector to remain weak, given weak economic growth ans low business confidence. The slip in manufacturing business confidence by three points to 24 in the quarter, shows that the majority (76%) of the sector is “displeased” with market expectations, he explained.
The data also showed that the seasonally adjusted manufacturing production increased 0.8% for the three months ending in October 2017. Only two out of 10 manufacturing divisions reported positive growth rates in this period.
These are petroleum, chemical products, rubber and plastic products, which were up 4.3%, contributing a percentage point to the growth. The other sector was iron and steel production, which grew 0.7% and contributed 0.1 of a percentage point to growth.
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