Picture: ISTOCK
Picture: ISTOCK

The mining sector slumped slightly in June but the sector will still contribute positively to the second-quarter gross domestic product (GDP).

The sector has picked up significantly in recent months. Mining production increased by 3.6% year-on-year in May after rising 1.6% in April, surprising many economists. In June, however, mining production decreased marginally, by 0.8%, year on year.

Seasonally adjusted mining production increased by 0.6% in the second quarter of 2017 compared with the first quarter of 2017.

The biggest positive contributor was manganese ore, which contributed 1.1 percentage points. while platinum group metals detracted 1.7 percentage points.

FNB economist Mamello Matikinca expected the mining sector to have moderated somewhat due to softer commodity prices.

Investec economist Kamilla Kaplan said last week: "Our calculations show that even if June’s month-on-month seasonally adjusted outcomes are 0.0% or even moderately negative, the sector will still avoid a quarterly fall in the second quarter of 2017."

Kaplan expected mining output to fall by 1.7% year on year.

Mining was a R230bn industry in the first quarter that contributed 7.48% of GDP.

Mineral sales fell 5.9% year on year in May.

Manufacturing figures, expected later today, will provide further clues about whether SA has steered out of recession.

Please login or register to comment.