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South Africa’s manufacturing output falters again in May – Stats SA

South Africa’s manufacturing output falters again in May – Stats SA
A worker wearing a protective mask holds a part for assembly at a BMW plant in Midrand, South Africa.(Photo: Waldo Swiegers / Bloomberg via Getty Images)

Manufacturing output declined for a second consecutive month, falling 2.6% in May compared with April, Statistics South Africa said on Monday. That bodes ill for a fragile economic recovery, now likely to be further hit by the civil anarchy.

The year-on-year number looks fabulous, but with all such comparisons to last year — especially April and May of 2020, when the initial hard lockdown was grinding the economy into the ground — it is wildly distorted. For what it’s worth, the sector’s output was 35.3% higher compared with May of last year. In April it was 88.1% higher. 

But on a month-on-month basis, the data look far less impressive. In May, output fell 2.6% compared with April — never a particularly productive month because of a spate of public holidays. In April this year, it declined 1.2% from the previous month. And over the course of the past six months, the month-on-month figure has only been positive twice, in March and December. 

Still, in the three months to May 2021, manufacturing output managed to eke out a rise of 1.0% compared with the previous three months. Stats SA said six of the 10 manufacturing divisions reported growth over this period, led by food and beverages, which rose 3.2%. That would in part be explained by the fact that the sale of alcohol had been prohibited for part of the previous three-month period.  

Other indicators have painted a slightly more upbeat picture of the sector. The Absa Purchasing Managers’ Index — which is completely focused on manufacturing — recovered from a slight dip in April to 56.2, rising to 57.8 in May. 

But it edged down again in June to 57.4 and, while a reading above 50 signals the index is in positive territory, it is hardly bullish. That suggests manufacturing is not going to spark significant economic growth in the second quarter (Q2). And the ongoing rioting linked to the jailing of former president Jacob Zuma, which has disrupted transportation networks, and the Level 4 restrictions that have been in place since the start of July, point to a bad start to Q3 for the wider economy. DM/BM 

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