Lockdown’s impact on manufacturing worse than 2008

The manufacturing production industry slumped by 49,4% y/y in April 2020, Statistics SA announced on Thursday afternoon.

The staggering decline comes after most of the sector came to a near standstill during the nationwide alert Level 5 lockdown in April and only partially returned to normal production levels in May.

Nicolai Claassen, Stats SA Director of Industry Statistics, describes the impact on the sector as much worse than what was seen during the 2008 financial global crises.

Source: StatsSA

“The largest factory decline that was also recorded then was also in April, of 23.2% y/y,” he says.

The biggest contributors to the decline were caused by:

  • Iron and steel, non-ferrous metal products, metal products and machinery (-65.4% and contributing -13.2 percentage points);
  • petroleum, chemical products, rubber and plastic products (-41.5% and contributing -9.5 percentage points);
  • motor vehicles, parts and accessories and other transport equipment (-98% and contributing -7.8 percentage points);
  • food and beverages (-19.4% and contributing -5.4 percentage points); and
  • wood and wood products, paper, publishing and printing (-49.2% and contributing -4.9 percentage points).

Seasonally-adjusted manufacturing production decreased by 16.9% in the three months ended in April 2020 compared with the previous three months. All ten manufacturing divisions reported negative growth rates over this period.

Source: moneyweb.co.za