Manufacturing production got the final quarter of a tough 2017 off to a good start, as expected, posting growth of 2.2% for October from a year earlier, after a revised 1.7% year-on-year contraction in September.

Compared with September, manufacturing production was up 0.7%, Statistics SA said on Tuesday.

For the three months to October, output increased 0.8%, with only two of 10 subsectors showing positive growth in that period: petroleum, chemical products, rubber and plastic products, up 4.3%; and? basic iron and steel, nonferrous metal products, metal products and machinery, up 0.7%.

For the year to date, however, manufacturing production has contracted 0.9%.

The sector was one of the main contributors to the 2% growth rate the South African economy posted in the third quarter.

Manufacturing posted growth of 4.3% compared with the second quarter, and contributed 0.5 percentage points to the gross domestic product (GDP) growth rate, Stats SA said last week.

"The manufacturing sector has derived some support from the strengthening global demand conditions but growth in the sector is being constrained by weak domestic demand and persistent policy uncertainty, which has weighed on confidence levels," Investec economist Kamilla Kaplan said in her weekly note released on Friday.

Purchasing managers indices (PMIs) have also consistently depicted a sector under pressure, and the November reading on Absa’s PMI, at 48.6 points, was a slight improvement but marked the sixth month in a row that it came in below the 50-point threshold between expansion and contraction.

SA’s economy is out of step with a global recovery, and growth for 2017 has been forecast at about 1% — far below the rate needed to create jobs and tackle a stubborn unemployment crisis.

Manufacturing is a potential job-creating engine for SA, which has one of the highest unemployment rates in the world, and industry body the Manufacturing Circle recently announced a plan to create a million factory jobs within the next 10 years.

Stats SA also released its quarterly employment statistics on Tuesday. The numbers — based on a survey of non-agricultural employers — showed that SA’s economy shed 31,000 jobs in the third quarter, with 5,000 of those coming from the manufacturing sector.

At end-September the sector employed 1.176-million people.

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