Factories Struggle as Power Cuts Threaten South African Growth

Rolling power blackouts in South Africa and the risk of strikes are weighing on manufacturing output, threatening already anemic economic expansion and clouding the central bank’s task as it seeks to tackle inflation.

A government report on Tuesday will probably show factory output increased 1 percent in March after two months of contraction, according to the median estimate of 17 economists surveyed by Bloomberg. The industry shrunk for seven of the last 12 months and the purchasing managers’ index signals a decline in April. While investors are pricing in a 25 basis-point rate increase by September, four-month forward-rate agreements have retreated over the past two weeks.