Manufacturing production data an encouraging sign of beginnings of economic recovery in SA, says SEIFSA

Manufacturing production data an encouraging sign of beginnings of economic recovery in SA, says SEIFSA (1)

JOHANNESBURG, 10 JUNE 2021 – The year-on-year improvement in April production and sales data is encouraging and bodes well for overall economic recovery in South Africa, the Steel and Engineering Federation of Southern Africa (SEIFSA) said today. 

According to manufacturing data released by Statistics South Africa (StatsSA) today, total manufacturing production improved to 87.9% year on year in April despite a 1.2% monthly decline that is attributable to the public holidays during the month that disrupted activity

Total manufacturing sales increased by 116.2% year on year in April, but declining by 2.8% from March. Year to date, production increased by 13%, with sales improving by 23.6%. The largest contributors were; basic iron & steel, non-ferrous metal products, metal productions & machinery, motor vehicles, parts & accessories and other transport equipment. The high figures recorded for April 2021 compared to April 2020 are an indication of a return to a degree of economic normalcy following the national lockdown that halted industrial activity. 

Within the M&E sub-sectors of the manufacturing sector, which account for 29% of total manufacturing production, total production across the 13 sub-categories increased by an average of 985.1% in April year on year, with total sales increasing by a significant 511.3% to R75.8 billion in April 2021. The largest sales value was in the non-ferrous metal products at R17.2 billion. April sales in the M&E sector were 15% lower than March 2021 sales due to the high number of holidays in the month.

SEIFSA Chief Economist Chifipa Mhango said although April’s output data indicates that economic recovery is firmly on track, the current bouts of load-shedding and high electricity costs will regrettably place significant strain on production. “The current environment is not conducive to meaningful recovery in our sector; however, we hope that the Government will support the growth momentum being seen in the manufacturing sector by focusing on policy implementation and the rollout of key infrastructure projects that will stimulate demand for M&E sector products,” Mr Mhango said, adding that the signing of the Steel Master Plan, which is scheduled for 11 June, is a step in the right direction to revive the M&E Sector. 

Related Articles

Responses