SA’s mining sector continues to show signs of improvement

The mining sector in South Africa continues to show signs of gradual improvement. Mining production increased by 2.1% in October when compared to the same time last year.

Between September and October, mining production increased by 3.4%.

The largest positive contributors to the annual increase were platinum group metals, chromium ore and iron ore.

Coal was a significant negative contributor.

Analysts say the less strict lockdown restrictions continue to be supportive of the sector. The sector continues to be supported by higher commodity prices and improved global demand.

The unreliable electricity supply however dampens the sector’s performance.

Manufacturing sector struggles

Meanwhile, the Manufacturing sector continues to struggle in its recovery path. Manufacturing production contracted by 8.9% in October compared to the same time last year.

The sector battles electricity supply challenges, and the effects of the pandemic causing global supply chain disruptions.

The largest negative contributions were made by the petroleum, chemical products as well as basic iron and steel and motor vehicle.

Manufacturing production contracted by 5.9% between September and October.

The ABSA manufacturing survey shows business confidence amongst manufacturers dipped for a second consecutive quarter in the fourth quarter.

Risks weighing on production include the fourth wave of COVID-19 infections and load shedding.