Manufacturing down for eighth straight month in January
Factory output fell 2% year on year in January, according to data from Stats SA
Manufacturing fell for the eighth consecutive month in January, recording a broad-based decline as activity dropped in all but one of the country’s manufacturing divisions.
Factory output fell 2% year on year in January according to data from Stats SA, coming off December’s decline when production fell 5.9%. January’s reading was, however, better than the Bloomberg consensus of 10 economists, who were expecting an annual decline of 4.3%.
On a seasonally adjusted month-on-month basis, manufacturing rose 2.5% — also better than the forecast of a 1% decline.
According to Stats SA, nine out of 10 manufacturing divisions recorded a drop in activity.
The main contributors to January’s print were a decline in the wood and wood products, paper, publishing and printing division, which shrank 6.7% according to Stats SA; this was followed by motor vehicles, parts and accessories and other transport equipment, which declined 5.6%; and a drop in the production of textiles, clothing, leather and footwear, which fell 10.3%.
January’s manufacturing figures are expected to give an indication of how the economy could perform in the first quarter of this year. SA is starting the year on a difficult note as it works to come back from the recession recorded in the last quarter of 2019.
Load-shedding, meanwhile, has continued to the plague the economy, intensifying to stage 4 this week.
Globally, fears have mounted over the spread of the coronavirus, sparking turmoil in world markets and seeing entities, such as Moody’s Investors Services, downgrade its expectations for global growth, with consequent cuts to SA’s forecasts.
Last week, Moody’s cut SA's growth for the second time in less than a month to 0.4% for 2020.