SA min­ing out­put surges, un­der­pinned by gold

The Star Early Edition - - BUSINESS REPORT - Ka­belo Khu­malo

MIN­ING pro­duc­tion data re­leased yes­ter­day by Sta­tis­tics SA showed that min­ing out­put in South Africa had surged 6.9 per­cent year-on-year in Au­gust fol­low­ing an up­wardly re­vised 1.9 per­cent rise in July, sur­pass­ing mar­ket con­sen­sus of a mod­est 0.1 per­cent gain.

The in­crease in pro­duc­tion was sup­ported by a surge in global com­mod­ity prices in the pe­riod and was un­der­pinned by strong per­for­mance in gold out­put which surged 7.7 per­cent in Au­gust com­pared to 5.8 per­cent recorded in July.

Di­a­mond pro­duc­tion inched up 27.7 per­cent in Au­gust com­pared to 16.6 per­cent in the pre­vi­ous month, while iron ore, which re­bounded 9 per­cent com­pared to a de­cline of 5 per­cent in the pre­vi­ous month.

On a monthly ba­sis, min­ing out­put went up 5.3 per­cent. John Ash­bourne, an Africa econ­o­mist at Cap­i­tal Eco­nomics, says Au­gust min­ing pro­duc­tion fig­ures sug­gest that the sec­tor re­mained strong in the mid­dle of the third quar­ter.

“This marked the sec­tor’s strong­est growth since March. The gold, iron and di­a­mond sec­tors made the largest con­tri­bu­tions to growth.

“But out­put rose across al­most the en­tire min­ing in­dus­try, with cop­per the only sub-sec­tor in which out­put fell year-on-year,” Ash­bourne says.

The min­ing pro­duc­tion fig­ures were the sec­ond set of pos­i­tive data that took the mar­kets by sur­prise, af­ter man­u­fac­tur­ing pro­duc­tion data also ex­ceeded ex­pec­ta­tions – in­di­cat­ing that the econ­omy has been on a sound foot­ing in the third quar­ter.

The re­bound in the man­u­fac­tur­ing sec­tor was pretty broad-based, with seven of the 10 sub-sec­tors per­form­ing bet­ter in Au­gust than they did in July. At the sea­son­ally ad­justed, 3-month-on-3-month rate that aligns with of­fi­cial GDP fig­ures, growth in the man­u­fac­tur­ing sec­tor picked up to a 22-month high of 1.3 per­cent.

All eyes will now be on the re­tail sales data ex­pected to be re­leased next week.

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