Mining enjoys strong growth in October after September’s contraction
Production expanded by a significant 5.2% year on year in October, with iron ore the biggest positive contributor
The mining sector recorded exceptionally strong growth in October after a contraction in September, indicating a strong beginning to the fourth quarter.
Mining production expanded by a significant 5.2% year on year in October, having contracted of 0.9% year on year in September.
Seasonally adjusted mining production increased by 3.4% in October 2017 compared with September.
The biggest positive contributors were iron ore which contributed 2.4 percentage points; and coal which contributed 1.5 percentage points.
FNB economist Mamello Matikinca expected a reversal of September’s contraction. Last week, Investec economist Kamilla Kaplan said mining is still deriving some support from the strengthening global demand conditions. She added, however, that growth is being constrained by weak domestic demand and policy uncertainty.
Kaplan had expected mining to rise to 2.2% year on year while macro-economics website Trading Economics projected mining output to have risen 1% from October last year.
Third-quarter GDP figures showed SA’s economy to be performing better than expected. GDP rose higher than expected, by 2% quarter on quarter in the third quarter of 2017. Mining contributed 1.5 percentage points to the GDP figure.