Procurement News Notice |
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| PNN | 9552 |
| Work Detail | THE two main drivers of SA’s economy, mining and manufacturing, had a dour performance in July, forcing economic growth off to a slow start in the third quarter. The two sectors make up about 20% of GDP and their output is an important indicator of economic growth. There was much cheer when the economy expanded 3.3% in the second quarter, supported by a recovery in mining and manufacturing. But the performance of the two sectors in July suggests the 3.3% economic growth rate was unlikely to have been repeated, and that growth for the year is still expected to be closer to zero. "Even if the economy sustains a 3% growth rate in the second half of this year, the calendar year average growth rate will barely be 1%," Rand Merchant Bank chief economist Ettienne le Roux said. The latest production figures showed that the economy struggled at the start of the third quarter and threw cold water on hopes that it had turned the corner, Capital Economics Africa economist John Ashbourne said. With the economic growth trend already so low, it would not take very much to push the economy back into contraction, Ashbourne said. Mining production decreased at a faster pace, while growth in the manufacturing sector slowed in July compared with the same period a year ago. The risk to output in the sectors remained strikes, slower economic growth in China and a slower recovery in local and global demand. Mining production declined 5.4% year on year in July after falling 3% in June, while manufacturing output rose only 0.4% year on year after a significant 4.7% growth in June. "Mining traditionally has a bumpy ride in the first half of each year and the second half normally sees a stabilisation in production," Chamber of Mines CEO Roger Baxter said. The decline in mining production was mainly due to lower platinum group metals and manganese ore production. The Association of Mineworkers and Construction Union (Amcu) has declared disputes with all three platinum houses over its demand for a R12,500 salary. In the manufacturing sector, there was higher output of petroleum, chemical products, rubber and plastic products. But production of vehicles, food and beverages, iron and steel and metal products and electrical machinery fell, hit mostly by weak global and domestic demand. One indication that manufacturing production growth will continue to be moderate is the movement in the seasonally adjusted Barclays purchasing managers’ index. It fell a sharp 6.2 index points to 46.3 in August. A reading below 50 signifies a contraction. |
| Country | South Africa , Southern Africa |
| Industry | Mining |
| Entry Date | 15 Oct 2016 |
| Source | http://www.bdlive.co.za/economy/2016/09/09/poor-showing-from-mining-and-manufacturing-dampens-growth-prospects |
