South Africa’s transport sector has contributed significantly to an unexpected boost in manufacturing production, the Bureau for Economic Research (BER) noted in its Weekly Review on Monday.
The BER said that according to the latest data released by Statistics SA, manufacturing production had risen by a surprising 2.9% year on year (y-o-y) in September, following an upwardly revised 1.7% increase in August.
“This was well ahead of market expectations for a 2.4% decline, which likely reflected the anticipated impact of the severe load-shedding experienced in the month. However, the load-shedding impact was outweighed by a surge in output in the transport sector (up by 43.2% y-o-y, contributing 3.7% points to annual growth), likely on the back of the flood-affected Toyota plant ramping up production,” the Bureau said.
It noted that if the transport sector was excluded, manufacturing output would have contracted by about 0.8%.
“Monthly output rose by a solid 4.9% (seasonally adjusted), once again supported by higher transport production (+23.5% month on month),” the BER said.
Overall, real manufacturing output increased by 1.9% between the second and third quarters of 2022, recovering from a 5.3% quarter-on-quarter (q-o-q) decline in the previous quarter.
“In the mining sector, production struggled on an annual basis, decreasing by a larger-than-anticipated 4.5% y-o-y in September. This was the eighth consecutive slump in activity and follows an upwardly revised 4.5% y-o-y dip in August,” the BER said.
The biggest drag on annual growth was iron ore (-23.1% y-o-y) and gold (-12.4% y-o-y). However, after declining by 3.4% q-o-q in the second quarter, real mining output increased by 2.2% during the third quarter of the year.
