ADVERTISEMENT

South Africa Factory Output Rises Most in Three Years in April

South Africa Factory Output Rises Most in Three Years in April

(Bloomberg) -- South Africa’s April manufacturing production rose the most since June 2016 as the output of iron and steel, as well as motor vehicles, parts and accessories, surged.

Factory output increased 4.6% from a year earlier, compared with revised growth of 1.3% in the previous month, Pretoria-based Statistics South Africa said Tuesday in a statement on its website. The median estimate of seven economists in a Bloomberg survey was for 1.3% expansion.

South Africa Factory Output Rises Most in Three Years in April

Key Insights

  • Monthly factory-output growth also beat forecasts, expanding 2.8% compared with a median estimate of 0.4%. The stronger-than-expected production growth could reduce chances that Africa’s most-industrialized economy is at risk of falling into a second recession in a year. Gross domestic product contracted an annualized 3.2% in the three months through March.
  • The increase in the output of iron and steel, motor vehicles, parts and accessories comes after manufacturing production shrank in the first quarter as the industry was hit by some of the worst power cuts yet in South Africa, contributing to the contraction in GDP.
  • The April factory release is the first high-frequency output data for the second quarter and manufacturing accounts about 13% of GDP.
  • The manufacturing purchasing managers’ index dropped to 45.4 in May, the fifth month below 50, which indicates contraction in the sector.

--With assistance from Simbarashe Gumbo and Gordon Bell.

To contact the reporter on this story: Prinesha Naidoo in Johannesburg at pnaidoo7@bloomberg.net

To contact the editors responsible for this story: Rene Vollgraaff at rvollgraaff@bloomberg.net, Ana Monteiro

©2019 Bloomberg L.P.