Slump in mining output points to a third quarter of GDP contraction
A 19% crash in gold production in September dashed hopes of the mining industry recovering from October's decline
A third month of SA's mining output declining in September raises the risk of third-quarter GDP showing yet another contraction.
Statistics SA reported on Thursday that mining production fell 1.8% in September from the same month in 2017, worse than the economists’ consensus, which had expected a small growth.
Mining is the first of the September figures for the various part of the South African economy used to calculate GDP, which showed a contraction in the first and second quarters. Economists define a recession as two consecutive quarters of GDP decline.
Stats SA reported that the three-month average to September showed a 2.2% decline, making the second quarter's 2% rise a false dawn.
Stats SA revised October's originally reported 9.1% decline in mining production to a less severe 6.7%.
Gold production plunged 19% in September from the same month in 2017, dragging overall production down 1.8% despite a 7.2% rise in platinum production.
The mining production index, which was set to 100 in 2015, came to 101.6 points in September, down from August's 105 points and 103.5 points in September 2017.
The mining industry's total sales amounted to R42.7bn in September, down from R42.9bn in August and R44.3bn in September 2017.