South Africa’s manufacturing-sector growth rebounded in April, official data showed on Wednesday, but business confidence dipped, pointing to tougher times ahead.
Manufacturing growth recovered to 9,8% year-on-year in volume terms after contracting 1% in March, Statistics South Africa said.
The data should ease central bank concerns about slowing economic growth, making an expected aggressive rate increase on Thursday more likely.
The sector was boosted by a weaker currency and by three Easter public holidays that are usually in April falling in March this year, resulting in a longer working month.
”It was encouraging, but one should bear in mind that there were more public holidays last year April than this year … also, production levels were very weak in March, due to [electricity] load-shedding activity,” Karen Chow, economist at independent market analysts ETM, said.
”I think most people expected a pick-up in April.”
The improvement masks continued pressure on growth, weighed down by slowing household demand due to past interest-rate hikes, sharply rising food and fuel prices and a chronic power shortage.
Economic growth slowed to a six-and-a-half-year low of 2,1% in the first quarter from 5,3% in the final three months of 2008, motor vehicle sales are falling, and confidence measures are declining.
The RMB/BER confidence index for the second quarter dipped to 45 after tumbling 19 points to 48 in the first quarter, a new survey showed. — Reuters