South African Factory Output Contracts For Eighth Straight Month

(Bloomberg) --

South Africa manufacturing output contracted for the eighth straight month in January as fewer wood products, paper and vehicles were made.

Manufacturing output fell 2% from a year earlier, compared with a 5.9% decline in the December, Pretoria-based Statistics South Africa said Thursday on its website. The median estimate of 10 economists in a Bloomberg survey was for a 4.3% contraction.

Key Insights

  • While production increased 2.5% compared with December, the drag on factory output is likely to continue. A gauge tracking expected business conditions in six months’ time, measured in Absa Group Ltd.’s Purchasing Managers Index, fell to the lowest level in more than a decade in February, indicating that sentiment in the industry may worsen.
  • Power cuts, which weighed on output in January, are expected to continue for at least 18 months, according to state utility Eskom Holdings SOC Ltd.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.