South Africa’s manufacturing output recovered in October to grow an unadjusted 5,2% year-on-year in volume terms, after contracting 1,4% in September, official data showed on Wednesday.
Compared with September, manufacturing production rose a seasonally-adjusted 7,2% in October, Statistics South Africa said.
”It’s definitely encouraging to see manufacturing production growth year-on-year rebound as it has … To a large extent it was expected because of such a poor month in September,” said Russell Lamberti, economist at ETM.
Stats South Africa said the recovery in manufacturing came after the decline in September 2007 due mainly to strike action in the motor vehicles, parts and accessories and other transport equipment division.
Manufacturing accounts for about 17% of the country’s gross domestic product, and ranks as the second biggest economic sector after financial services. The sector shrank an annualised 2,5% in the third quarter of this year after declining 0,1% in the second quarter.
”Certainly when one looks at the fact that we were in a manufacturing recession for the second and third quarters of this year, it’s certainly encouraging to see an element of that sector coming back to life in October,” said Lamberti.
In the three months to the end of October, manufacturing volumes contracted 0,7% compared with the previous three months, also on a seasonally adjusted basis.
Analysts said there was nothing in the manufacturing data to sway the central bank from lifting interest rates 50 basis points on Thursday, as it pursues its fight to bring targeted CPIX inflation back to within a 3% to 6% band. – Reuters 2007