The manufacturing industry in South Africa continues to struggle to recover from the Covid-19 induced depression as factory output fell more than expected in February. Picture: Oupa Mokoena/African News Agency (ANA)
The manufacturing industry in South Africa continues to struggle to recover from the Covid-19 induced depression as factory output fell more than expected in February. Picture: Oupa Mokoena/African News Agency (ANA)

February output down as manufacturing continues to struggle

By Siphelele Dludla Time of article published Apr 9, 2021

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JOHANNESBURG - THE MANUFACTURING industry in South Africa continues to struggle to recover from the Covid-19 induced depression as factory output fell more than expected in February.

Data from Statistics South Africa (StatsSA) yesterday showed that manufacturing production remained in contractionary territory as it fell by 2.1 percent in February from a year ago. February followed an upwardly revised 4.2 percent slump in January and was significantly weaker than market expectations of a 0.4 percent fall.

StatsSA said output was dragged down largely by declines in petroleum and chemical products, rubber and plastic, decreasing by 8.4 percent. The food and beverages division slid by 0.7 percent in February, much slower than the 6.1 decline in January. Textiles, clothing, leather and footwear grouping experienced a marginal 0.1 percent gain.

Director of industry statistics at StatsSA Nicolai Claassen said five of the 10 manufacturing divisions recorded a slowdown in activity. Claassen said the division that includes manufacturers specialising in basic iron and steel, metal products and machinery was the second biggest negative contributor to overall output, decreasing by 4.8 percent.

“On the upside, the biggest positive contributor to manufacturing output continues to be the automotive division, increasing production by 13.2 percent year-on-year. This was driven mainly by the manufacturing of parts and accessories.”

Since the Covid-19 pandemic, manufacturing output recorded positive only in December boosted by the festive season demand and eased lockdown restrictions.

Investec economist Lara Hodes said February’s improved manufacturing outcome was in line with the advance indications provided by the February Absa manufacturing purchasing managers index (PMI).

The Absa manufacturing PMI rose to 53 index points in February from 50.9 index points in January as industry was relatively optimistic about the six months outlook.

Hodes, however, said the manufacturing industry was far from being out of the woods as challenges lay ahead.

FNB economist Thanda Sithole said the outlook for the manufacturing sector was steady. “We anticipated global economic recovery to support the manufacturing sector through exports, although the rising input costs of oil and other raw materials could limit production volumes.

“Locally, the persistent electricity supply disruptions pose a risk to economic activity.”

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