Manufacturing output remained tepid in May
Manufacturing grew 1% year on year in May, a little worse than the market expected, and activity dropped off a little compared to April
SA's manufacturing sector grew a marginal 1% year on year in May, but failed to hold onto a surge experienced in April, when the sector rebounded after being hit by load-shedding in first quarter of 2019.
Output fell 1.5% in May when compared to April, Statistics SA said on Thursday, more than twice the 0.6% contraction forecast in a Bloomberg poll. That consensus had expected a 1.3% year on year rise for the sector.
Adding to the gloom, Stats SA revised the year on year growth rate for the sector to 4.3%, from 4.6% previously.
An increase in activity in the food and beverages sector in May lifted the headline figure the most, growing 6.8% year on year, and contributing 1.8 percentage points.
The most significant negative contribution was made by the wood and wood products, paper, publishing and printing division, which fell 3.9% year on year, contributing 0.4 percentage points of decline to the headline figure.
SA's manufacturing sector remains under pressure, hit by policy uncertainty and receding growth expectations for 2019 domestically, as well as weakening global trade conditions.
Local factory owners experienced an uptick in activity in June, when the seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 46.2 index points from 45.4 in May.
The average level for the second quarter was 46.3 points, however, below the level recorded in the first quarter of 2019, and the index has been in contractionary territory for six consecutive months in June.