Johannesburg, 10 September 2019 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the increase in broader manufacturing sector production, as indicated in manufacturing production figures released by Statistics South Africa (Stats SA) this afternoon.
The latest preliminary seasonally-adjusted production data for the broader manufacturing sector indicated that output moderately increased to -1.1 percent year-on-year in July 2019, from -3.6 percent in June 2019.
Speaking after the release of the numbers, SEIFSA Economist Marique Kruger said the data – which is still trending in the negative territory, despite the moderate increase in July – is worrisome. However, on a month-on-month basis, the manufacturing sector’s performance was more inspiring, registering 0.4 percent in July 2019, significantly improving on the -1.9 percent recorded in June 2019.
“Despite the increase in manufacturing output, the concerns regarding various constraints remain, including volatility in exchange rate, increasing intermediate input costs, operational costs and high fuel and energy costs,” Ms Kruger said.
She said these variables undoubtedly constrained the value add by manufacturing to the Gross Domestic Product (GDP) in the second quarter of 2019, and have the ability to further hinder manufacturing contribution in the third quarter of 2019.
In conclusion, Ms Kruger said SEIFSA expects the generally weak exchange rate to boost manufacturing export competitiveness in the mid-term, which will be to the benefit of businesses.
“This is imperative in order for businesses to stay resilient as we collectively seek ways of re-igniting long-term domestic growth,” Ms Kruger said.