Manufacturing growth beats expectations in March
Production, however, fell 2.4% in the first quarter, which will weigh on economic growth
Manufacturing production grew in March despite expectations of a contraction.
Manufacturing production grew 1.2% in March, after the sector saw subdued growth of 0.5% in February. This was in stark contrast to the Bloomberg consensus of a contraction of 0.2%.
The biggest growth drivers were a 7% rise in petroleum, chemical products, rubber and plastic products, a 3.2% jump in basic iron and steel, nonferrous metal products, metal products and machinery and 1% increase in food and beverages.
Production, however, decreased 2.4% in the first quarter, which will weigh on economic growth.
While the sector has seen growth in recent months, the re-emergence of load-shedding has weighed on production volumes, keeping growth constrained.
Statistics SA’s manufacturing production index, which was at 100 points in 2015, came in at 101.1 points in March, up from 95 points in February.
The monthly changes in factory output measured by Statistics SA usually tend to be foreshadowed by the Absa-sponsored purchasing managers index (PMI), which is published on the first business day of each month.
The PMI, which gauges activity in the manufacturing industry, fell to 45 points in February, indicating a contraction.
However, in recent months, the PMI and production figures have not been in tandem.