GO
Loading...

INSTANT VIEW 1-S.Africa manufacturing output up 3 pct y/y in August

Thursday, 11 Oct 2012 | 7:19 AM ET

JOHANNESBURG, Oct 11 (Reuters) - South Africa's manufacturing output beat market expectations in August, growing by 3.0 percent year-on-year in volume terms compared with a revised 6.3 percent rise in July, data showed on Thursday.

On a month-on-month basis production rose by a seasonally adjusted 3.0 percent and grew by 0.9 percent in the three months to August compared with the previous quarter, Statistics South Africa said.

Economists polled by Reuters earlier this week expected a 1.1 percent year-on-year contraction in August.

ANALYST COMMENT CHRISTIE VILJOEN, ECONOMIST, NKC INDEPENDENT ECONOMISTS

"The month on month number looks good, which can help explain why the year on year growth is better than expected.

"This was definitely not expected considering the problems in the mining sector that started in August would have had an impact in manufacturing as well.

"In the past three months production increased 0.9 percent from the preceding three months. We should take that as a positive considering all the negative international news that's telling us that the exports aren't doing that well and that exports might affect consumer confidence."

MARKET REACTION

The rand weakened to 8.7190 against the dollar by 1117 GMT from 8.6969 before the data was released at 1100 GMT.

The yield on the three-year bond edged up to 5.41 percent from 5.405 percent and that for the 14-year bond

ticked up to 7.715 percent from 7.71 percent.

BACKGROUND

- The manufacturing sector contributes about 15 percent of gross domestic product and is key for creating employment in an economy with an official jobless rate of about a quarter of the labour force.

- Output increased by 2.5 percent in 2011, only half of the expansion seen in 2010, Statistics South Africa data shows.

- South Africa plans to spend 5.8 billion rand over the next three years to help manufacturers affected by the global economic downturn upgrade their factories, improve products and train workers.

(Reporting by Tshepo Tshabalala)

((xola.potelwa@thomsonreuters.com)(+27 11 775 3098)(Reuters Messaging: xola.potelwa.thomsonreuters.com@reuters.net))

Keywords: SAFRICA MANUFACTURING/