SA manufacturing declining in face of constrained local demand

The South African manufacturing sector is likely to decline further in the third quarter as domestic demand remains constrained in a stagnant economy. Photo: Pixabay
JOHANNESBURG – The South African manufacturing sector is likely to decline further in the third quarter as domestic demand remains constrained in a stagnant economy.

Statistics South Africa (StatsSA) said yesterday that manufacturing production had decreased by 2.4percent year on year in September following August’s 1.5percent slide.

Investec economist Lara Hodes said this implied that the manufacturing sector should detract from topline economic growth in the third quarter following its 0.3percent addition to the headline outcome in the second quarter.

“September concludes the sector’s production figures for the third quarter of 2019 and as such gives us an indication of its potential contribution to third-quarter GDP outcome,” Hodes said.

“A subdued demand environment continues to plague the domestic economy. President Ramaphosa is committed to fiscal consolidation, faster, inclusive growth and the repair of SOE (state-owned enterprise) finances. An acceleration in confidence, investment and economic growth is anticipated on the back of this.”

Source: iol.co.za