South Africa Manufacturing Rebounds; Confidence Slumps
South African manufacturing production increased 1.2 percent in April from a year earlier, rebounding from a contraction in the previous month, the statistics office said.
Factory output rose after shrinking a revised 2.9 percent in March, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of 11 economists was for growth of 0.9 percent. Production expanded 1.3 percent in the month and 0.4 percent in the three months through April from the previous period.
The rebound in manufacturing may be short-lived, with business confidence declining the most since 2008 in the second quarter, Rand Merchant Bank said in an e-mailed statement today. The industry makes up 15 percent of the economy and production is being undermined by the debt crisis in Europe, which buys about a third of South Africa’s manufactured exports.
The data “will reinforce the fact that it isn’t just sentiment, economic data has already been impacted,” Razia Khan, head of Africa research at Standard Chartered Plc in London, said in an e-mailed note to clients.
South Africa’s Reserve Bank kept its benchmark interest rate at 5.5 percent for a record 18 months to help stimulate the economy, which the bank forecasts will expand 2.9 percent this year.
The South African Chamber of Commerce and Industry said today its business confidence index declined to 92.8 in May, the lowest level in more than nine years, as the economic recovery weakened. The RMB/BER confidence index dropped 11 points to 41 in the second quarter, according to Rand Merchant Bank, a unit of Johannesburg-based FirstRand Ltd. (FSR)
The rand rose 0.6 percent to 8.2607 a dollar at 2:17 p.m. in Johannesburg. The yield on the rand bond due in 2015 fell 3 basis points, or 0.03 percentage point, to 6.24 percent.
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