Manufacturing sees biggest decline in almost 5 years
South African manufacturing declined the most in almost five years in July after a four-week strike disrupted factory output.
Production shrank 7.9% from a year earlier, compared with a revised 0.2% expansion in June, the Pretoria-based Statistics South Africa said on its website. The median estimate in a Bloomberg survey of 15 economists was for a 5.8% contraction. Output fell 3.6% in the month.
About 220 000 workers downed tools over pay in July, forcing carmakers such as General Motors to temporarily shut their plants. That followed a five-month strike at the world’s largest platinum mines that dented mining and manufacturing, which together account for about a fifth of the economy. Mining output dropped 7.7% in July from a year earlier, the statistics agency said in a separate report on Thursday.
“The poor performance of the manufacturing sector adds to broader concerns over the domestic economic growth outlook,” Johannesburg-based Tradition Analytics said in an emailed statement.
Africa’s second-largest economy will probably expand at the slowest pace this year since the 2009 recession, according to forecasts from the central bank. The gap on the current account, the broadest measure of trade in goods and services, widened to 6.2% of gross domestic product in the second quarter after exports dropped, the bank said this week.