TheBrief

ECON­OMY

Cape Times - - BUSINESS REPORT -

MAN­U­FAC­TUR­ING MAKES HEAD­WAY

THE MAN­U­FAC­TUR­ING sec­tor in Au­gust shrugged off the weak­en­ing rand, higher fuel prices and in­creased 1.3 per­cent yearon-year. Sta­tis­tics South Africa yes­ter­day said Au­gust's out­put print slowed from a 2.8 per­cent gain in July, but was well above mar­ket con­sen­sus of a 0.6 per­cent in­crease. On a monthly ba­sis, fac­tory out­put went up 0.1 per­cent, af­ter a 1.4 per­cent rise in the pre­vi­ous month. Ger­rit van Rooyen, an an­a­lyst at NKC African Eco­nom­ics, said man­u­fac­tur­ing pro­duc­tion seemed to be re­cov­er­ing mod­er­ately in the third quar­ter, but the sec­tor still faced many head­winds. “The re­cently re­vised Min­ing Char­ter re­moves some in­vestor un­cer­tainty, but the out­come of mooted land re­form reg­u­la­tions is still un­cer­tain. Pres­i­dent Cyril Ramaphosa's eco­nomic re­cov­ery plan will at best pro­vide some mod­est sup­port to the man­u­fac­tur­ing in­dus­try,” Van Rooyen said. The surge in fuel prices in the past few months has seen the key man­u­fac­tur­ing sec­tor come un­der in­tense pres­sure, in­creas­ing pro­duc­tion costs, which limit the sec­tor's global com­pet­i­tive­ness. Data from the stats agency last month showed that the bat­tered man­u­fac­tur­ing sec­tor let go of 13 000 work­ers in the sec­ond quar­ter of the year. Ac­cord­ing to Ramaphosa's stim­u­lus pack­age to reignite the ail­ing econ­omy, the In­dus­trial De­vel­op­ment Cor­po­ra­tion will be aim­ing to in­crease its ap­provals to R20 bil­lion over 12 months, an in­crease of 20 per­cent on the pre­vi­ous year. ”This fund­ing will tar­get the pro­duc­tive sec­tors of the econ­omy, in­clud­ing man­u­fac­tur­ing, min­ing, in­dus­trial in­fras­truc­ture and sec­tors in dis­tress,” the pres­i­dent said. The re­cently signed Africa free trade area agree­ment was also ex­pected to be the main en­abler in which the con­ti­nent's dwin­dling man­u­fac­tur­ing sec­tor can grow. | Kabelo Khumalo

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