Factory production grew 3 percent, down from a revised 6.3 percent in July, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of nine economists was for a contraction of 1.1 percent. Output rose 3 percent in the month.
“This is a reflection of the overall picture globally,” Nicky Weimar, an economist with Nedbank Group Ltd. (NED), South Africa’s fourth-largest bank, said today in a phone interview from Johannesburg. “You will see a continuation of this slow crawl.”
South Africa’s economic outlook is deteriorating “rapidly” as strikes that began in platinum mines in August spread, Reserve Bank Governor Gill Marcus said yesterday. Manufacturing, which makes up 15 percent of the economy, is already under pressure as a debt crisis in Europe cuts demand for manufactured exports. The central bank, which lowered its growth estimate for this year to 2.6 percent, kept its benchmark lending rate at 5 percent last month.
The purchasing managers’ index fell to a three-year low of 46.2 in September, indicating that factory output contracted in the month, according to Kagiso Tiso Holdings.
Finance Minister Pravin Gordhan is set to reduce his economic growth forecast when he presents the mid-term budget on Oct. 25. The economy expanded 3.1 percent last year.
The rand pared its gains after the manufacturing data, dropping to 8.7453 as of 1:44 p.m. in Johannesburg. The yield on the government bond due in 2021 dropped one basis point to 6.8 percent.
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