South African manufacturing growth accelerated more than estimated in July as the decline in the rand boosted revenue for exporters.
Factory output rose 5.4% from a revised 0.5% a month earlier, Statistics South Africa said on its website on Wednesday. The median estimate in a Bloomberg survey of 12 economists was 1.6%. Production increased 5% in the month.
"Our exports are performing better," said Ilke van Zyl, an economist at Vunani Securities in Johannesburg. "The impact the rand will have on manufacturing production is not a long-term effect, it has more of a short-term impact."
The rand has declined 15% against the dollar this year, the worst performer among the 16 major currencies tracked by Bloomberg, boosting revenue from exports. The expansion in factory output, signaled by the nation’s purchasing managers' index rising to a six-year high in August, may be limited by recent strikes by autoworkers and miners.
The South African Reserve Bank has kept its benchmark repurchase rate unchanged for a year at 5% as inflation pressures from the rand prevent it from cutting borrowing costs to stimulate the economy.
The rand gained 0.4% to 9.9463 per dollar at 1:30 pm in Johannesburg on Wednesday. The yield on the rand bond due in December 2026 fell 8 basis points, or 0.08 percentage point, to 8.25%. – Bloomberg