Picture: ISTOCK
Picture: ISTOCK

Output from SA’s manufacturing sector, which accounts for about an eighth of SA’s economy, ended the year with a decline.

Stats SA’s manufacturing output index, which was set to 100 in 2010, came in at 98.5 points in December, a 2% decline from the same month in 2015.

This was worse than economists’ expectations, which had not been rosy anyway: Trading Economics had forecast an increase of 0.1% while the Bloomberg consensus was for no change. Total manufacturing output for 2016, however, was 0.8% higher than in 2015.

South African factories sold R160bn worth of goods in December, according to Stats SA. Without taking inflation into account, this was a 5% increase on the R153bn sold in December 2015.

Total manufacturing sales for 2016 came to more than R2-trillion, a 6.5% increase on 2015’s R1.89-trillion.

Manufacturing output was down 1.1% in the December quarter. This decrease was mainly due to lower production in the food and beverages sector, which was down 6.2%; and in petroleum, chemical products, rubber and plastic products, which was down by 2.3%

Mining and manufacturing output are two major pointers for the economy’s growth prospects. The Reserve Bank’s most recent forecast put economic growth for 2016 at 0.4%. Mining output, released earlier on Thursday, decreased by 1.9% year on year in December, and was 2.7% down for the quarter.

Nedbank chief economist Dennis Dykes discusses weak mining and manufacturing data for December and whether a recovery lies ahead in 2017.

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