Mining production springs surprise with strong growth
MINING surprised on the upside in August with exceptionally strong growth‚ indicating that GDP growth may be stronger in the third quarter.
Mining production increased by a significant 6.9% year-on-year in August after increasing by 0.9% year-onyear in June.
The biggest positive contributors were iron ore‚ which contributed 1.3 percentage points, diamonds with 1.2 points, and gold with 1.1 points.
Seasonally adjusted mining production increased by 5.3% in August compared with July and increased by 1.4% in the three months ended August compared with the previous three months.
Many economists had been expecting a contraction in the sector.
FNB economist Mamello Matikinca had expected a year-on-year contraction for the first time this year, primarily due to the higher base of August last year.
“The global oversupply of iron ore has pushed the price of the commodity lower‚ and output of the ore‚ which accounts for nearly 15% of mining production‚ should have softened‚” she said.
Investec economist Kamilla Kaplan said she had expected mining to contract by 2% year-on-year, while macroeconomics website Trading Economics had projected mining output to have risen 0.3% from July last year. – BusinessLIVE