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Slowdown in Production in July
| News by Staff ReporterThe latest data from Stats SA revealed a significant drop in output in July
Manufacturing production in July slowed considerably compared to the same month last year, shocking economists and reinforcing thoughts of a weakening economy.According to data released yesterday (Thursday) by statistics firm Stats SA, manufacturing production in July fell 6,0% year-on-year, while the same percentage drop was seen in the figures compared with June 2011 and seasonally adjusted.
“The 6,0% year-on-year decrease in manufacturing production for July 2011 was mainly due to lower production in the basic iron and steel, non-ferrous metal products, metal products and machinery division (-11,7% and contributing -2,4 percentage points),” said Stats SA.
Decreases were also recorded in the petroleum, chemical products, rubber and plastic products division; the wood and wood products, paper, publishing and printing division; the motor vehicles, parts and accessories and other transport equipment division; and the food and beverages division.
Economists had forecast a decrease in manufacturing production of 0,5% year-on-year in July – a long way off from yesterday’s figures. The 6,0% drop in manufacturing output is the largest decline in nearly two years.
Mining was also seen to drop at an accelerated rate, falling 5,1% year-on-year in July. These figures, together with the weak figures for manufacturing output, have added to speculation of a further rate cut.
The latest RMB/BER Business Confidence Index (BCI) released on Tuesday (6 September) also revealed business confidence to be at a one-year low, dropping nine points to 39 on the index.
The weak production figures in July may also be partly due to nationwide strikes in the fuel, chemical and metals industries during that month, but expectations of a turnaround in the economy in the coming months remain muted.
Source: www.bizpremises.co.za
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