South Africa’s manufacturing data has shown a 0.2% increase in February this year compared to February 2021.
According to Stats SA, the most significant positive contributions came from food and beverages, basic iron and steel, nonferrous metal products, metal products, and machinery.
The manufacturing sector was well on a recovery road, however, February data came out disappointing. Data showed a decrease of 1.1% compared to January.
Economists point a finger at the Russia-Ukraine conflict that has had an impact on petroleum, wheat, maize, and the likes of determining international prices, thus impacting the local manufacturing sector.
A discussion on the impact of the Ukraine-Russia conflict on agricultural commodities:
Rand Swiss’ Gary Booysen says with numbers like these there is anticipation to see what the March and April numbers look like for this sector.
“The one concern that you might have about South Africa being again a commodity-driven economy, our currency is starting to be very strong, which is bad for our manufacturing sector going forward.”
Senior Economist at ABSA Miyelani Maluleke says the February data for manufacturing was influenced by the weeklong load shedding that hit the country in February.
“What have witnessed was also quite broad-based across different parts of the sector which seems to suggest to us that the seven days of load shedding that we had in February affected production across the different parts of the sector. We are hopeful that in March we will see some recovery.”
Meanwhile, seasonally adjusted manufacturing production in the three months ended in February increased by 3.8% compared with the three months prior. Nine of the ten manufacturing divisions reported positive growth rates over this period.