Johannesburg - South Africa's manufacturing output rose more than expected in April, official data showed on Thursday, a bright spot in an economy facing declining production in its key mining sector.
Manufacturing in Africa's most industrialised economy rose by 2.9 percent year-on-year in April after falling by a revised 2.4 percent in March, Statistics South Africa (Stats SA) said.
A Reuters poll of economists had expected the headline figure to show manufacturing grew by 1.3 percent in April.
On a month-on-month basis, factory production was up 0.8 percent, and rose 1.1 percent in the three months to April compared with the previous three months.
“Today's figures suggest that the economy gained a bit of momentum at the beginning of second quarter. The mining and manufacturing sectors will play key role in determining whether South Africa avoids a second quarter of contraction, and thus a technical recession,” Africa economist at Capital Economics, John Ashbourne, said in a note.
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Separately, Stats SA said mining output fell by 6.9 percent in April from a revised record fall of 17.8 percent in March.
Mining contributes nearly 8 percent to South Africa's GDP. The country is a top producer of platinum, gold, iron ore among other minerals.
BNP Paribas Securities economist Jeffrey Schultz said the mining sector was in a recession with production growth already down 10 percent year-on-year in the first four months of 2016.
“The outlook for the industry remains unsettling given a subdued commodity price outlook, wage negotiations in the platinum sector which kick off soon and depressed confidence and investment in the sector as policy uncertainty continues to weigh,” he said.
South Africa's economy contracted more than expected in the first quarter mainly due to a slide in the mining sector, putting it on track for its first recession in seven years.
REUTERS