Growth in South Africa’s manufacturing output volumes eased in the year to November, data showed on Thursday, but this might not sway the central bank’s next decision on interest rates later this month.
Statistics South Africa said manufacturing output slowed to 4,4% year-on-year in volume from an upwardly revised 5,7% in October, pointing to repressed demand due to higher interest rates.
Compared with October, manufacturing production in volume terms shrank by a seasonally adjusted 0,6% in November, while in the three months to end-November, volume growth was 0,6% compared with the previous three months.
”Overall it shows a declining trend in manufacturing activity,” ETM economist Russell Lamberti said of the data.
”I think, added to an overall perspective of an economy that is coming under pressure, one could argue that these figures do show that the Reserve Bank should hold off hiking interest rates again,” he said.
South Africa’s central bank has raised its repo rate by a total of 400 basis points to 11% since June 2006 to rein in inflationary consumer demand. The bank will again decide on interest rates at the end of January.
On Wednesday the South African Chamber of Commerce and Industry said its Business Confidence Index fell to a four-year-low in December, reflecting the dampening effect of tighter monetary policy. — Reuters