Mining output contracts 0.9% in September, surprising economists
However, some economists still expect mining to remain robust and make a positive contribution to third-quarter GDP
Mining output contracted by 0.9% in September from the same month in 2016, a shock to economists who had expected only a small slowdown from August’s 7.9% growth.
Diamond production fell 32.1% and iron ore production 20.7% in September from August, Statistics SA reported on Thursday.
Thanks to July’s 2.1% growth and August’s 7.9% growth, mining will make a positive contribution to SA’s third-quarter GDP, despite the 0.9% slump in September.
Seasonally adjusted mining production increased by 2% in the second quarter of 2017 compared with the first. The biggest positive contributor was platinum group metals (PGMs) which contributed 1.2 percentage points.
FNB economist Mamello Matikinca said mining output expanded for the last eight months on the back of rising commodity demand from China. She expected mining to remain robust.
Investec chief economist Annabel Bishop said last week: “Higher commodity prices and the rebound in global merchandise trade have aided the performance of the local mining and manufacturing sectors.” Bishop had expected mining to grow by 7.3% year on year in September.
Mining is a R230bn industry and contributes 7.48% of GDP.
The manufacturing figures expected later today should provide an indication of whether SA will have stronger GDP growth in the third quarter.