Johannesburg, 12 February 2019 – The decrease in output in the broader manufacturing sector in December 2018, as released by Statistics South Africa (StatsSA) today, is worrying, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Economist Marique Kruger said today.
The latest preliminary data published by StatsSA today indicated that production in the broader manufacturing decreased on a year-on-year basis in December 2018, when compared with November 2018. On a continuous three-monthly basis, output in the manufacturing sector has been very volatile, slowing down from 3.0 percent in October 2018 to 1.3 percent in November 2018 and to 0.1 percent in December 2018.
Ms Kruger said the performance in December 2018 was generally unexpected, especially after the release of promising data for the Purchasing Managers’ Index (PMI) which increased to 50.7 points in December 2018, effectively signaling the first time that the data trended above the benchmark level of 50 in 2018.
“The deceleration in output does not augur well for manufacturers since a positive performance is imperative towards lifting the real Gross Domestic Product figures for the fourth quarter of 2018,” said Ms Kruger.
However, Ms Kruger said the expectation was for businesses to remain resilient in the face of the current difficulties, including volatility in production, subdued domestic demand and high unemployment levels.
“Hopefully, a rebound in production in January 2019 will help in clawing back lost job opportunities from the sector,” concluded Ms Kruger.
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