S. Africa Manufacturing Climbs as Strike Effect Wanes

South African manufacturing unexpectedly accelerated for a second month in November, as production rebounded following the settlement of a series of mining strikes.

Factory output rose 3.4 percent, compared with a revised 2.7 percent in October, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of eight economists was 1.1 percent. Output rose 2.3 percent in the month.

Pay strikes that began in platinum mines in August spread to gold, coal and iron-ore operations, with about 120,000 workers downing tools at the peak of the unrest, according to the Chamber of Mines. Labor action also disrupted transportation and agriculture. The mining strikes began tailing off in October, as pay settlements were reached.

“Half our manufacturing basically delivers to the mining industry or related industries,” Mike Schussler, chief economist at independent research group Economists.co.za, said today in a phone interview from Johannesburg before the release of the data. “Our manufacturing is still not out of a longer- term slump. We’ve got a severe problem to get the production side of our economy, including manufacturing and mining going.”

Besides having to contend with labor action, South African producers have had to find alternative markets for their goods following a decline in demand from Europe, which buys about a third of the country’s manufactured exports. The 17-nation euro- area economy will probably shrink 0.3 percent this year, the European Central Bank said on Dec. 6.

The central bank held its benchmark repurchase rate at 5 percent on Nov. 22, the lowest level in more than 30 years, after a surprise cut on July 19 to stimulate the economy. South Africa (WHL)’s gross domestic product will expand 2.5 percent this year, according to the bank.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.