Johannesburg, 11 June 2019 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) is encouraged by the continuous positive growth in broader manufacturing sector production, as indicated in manufacturing production figures released by Statistics South Africa (Stats SA) this afternoon.
Speaking after the release of the data, SEIFSA Economist Marique Kruger said despite the struggling economy and continuous headwinds faced by companies in the broader manufacturing sector, in which includes the Metals and Engineering (M&E) cluster of industries, businesses were able to stay resilient.
The latest preliminary seasonally-adjusted production data for the broader manufacturing sector released by Stats SA indicated that output improved to 4.6 percent year-on-year in April 2019, when compared to April 2018. On a continuous three-monthly basis, output in the broader manufacturing sector consecutively trended positively from 0.7 percent in February 2019, to 1.3 percent in March 2019 and to 4.6 percent in April 2019. On a month-on-month basis, the manufacturing sector’s performance was also inspiring – registering 2.8 percent in April 2019 when compared to 0.9 percent March 2019.
Ms Kruger said despite the encouraging production data, there are still concerns regarding various constraints, including volatility in exchange rate, increasing intermediate input costs, operational costs and high fuel and energy costs.
“These variables, no doubt, dropped the value add by manufacturing to the Gross Domestic Product (GDP) in quarter one of 2019, and have the ability to further hinder manufacturing contribution in the second quarter of 2019,” she said.
However, Ms Kruger said, the expectation is for the generally weak exchange rate to boost manufacturing export competitiveness in the mid-term, to the benefit of businesses, in order to stay resilient and build on the positive performance of the last three months, as we collectively seek ways of re-igniting long-term growth and the sector’s value add.