SOUTH AFRICAN ECONOMY FACING STRAIN
South Africa’s key mining and manufacturing sectors have contracted, confirming that the economy is facing strain.
The latest statistics reveal that mining production fell by 2.9 per cent year on year in October while manufacturing output declined by 2.7 per cent year on year in that month.
A subdued mining sector will have an impact on the downstream sectors like manufacturing and other secondary sectors. Mining production has been dampened by relatively weak global economic activity and sluggish domestic demand.
The main negative contributors were the platinum group metals for which output contracted by 12 percent. The other negative contributors were manganese ore, other non-metallic minerals and gold.
Manufacturing production fell on the back of declines in the sub-sectors of food processing, chemicals and automotive industries with the weak global and domestic demand to blame.
The contraction in the mining and manufacturing sectors will likely contribute to weaker gross domestic product (GDP) growth in the fourth quarter of the year, translating to even weaker job creation prospects.
Source: NAM NEWS NETWORK