South Africa’s mining production was stagnant in May after showing signs of growth in the previous month.
This is according to the latest data released by Statistics SA, which showed that annual mining production showed little activity in May after rising by an upwardly revised 1.4% year-on-year in April.
The Bureau for Economic Research economists noted in the BEW Weekly on Friday that the headline reading for mining was lower than expected as the market consensus had called for a modest increase of 0.9%.
The main positive contributors were coal, up 7% y-o-y, and chromium ore, up 17.1%. By contrast, gold was down 9% and platinum group metals (PGMs), down 4.1%, were the main negative contributors.
“On a monthly basis, seasonally adjusted mining production unexpectedly contracted by 0.6% following a 0.8% increase in April. The unexpected decline was driven by a double-digit slump in PGMs, down 11% month-on-month in May,” the bureau economists noted.
Meanwhile, manufacturing sector production fell by 0.6% y-o-y in May, following a downwardly revised 4.9% increase in April.
The decline was driven by basic iron and steel, non-ferrous metal products, metal products and machinery which was down 8.1%, and motor vehicles, parts and accessories and other transport equipment, down 11.8%.
After increasing by 5.2% m-o-m in April, seasonally adjusted manufacturing production declined by a bigger-than-expected 3.2% in May.
“Mining and manufacturing are arguably the most electricity-intensive sectors of the economy. Despite the stable electricity supply through the second quarter, these two sectors struggled in May after bouncing back in April,” the economists noted.
However, the economists said they still anticipated “some recovery” in overall real GDP after the first quarter decline by way of “modest” quarterly real GDP expansion.
