Mining and output data lift the rand

THE RAND continued a threeday run of gains yesterday, following better-than-expected mining and manufacturing data.

The rand traded at R13.6637 per dollar at 6.23pm, compared with late trade in New York of R13.7109 on Wednesday.

The currency reversed earlier losses after better-than-expected data showed that manufacturing and mining output rose in July, but the data was mainly driven by lower base effects emanating from strikes last year. Manufacturing production rose by 5.6 percent year-on-year in July, after having contracted in each of the previous months. The market forecast was 1.3 percent.

Nedbank economists, Dennis Dykes and Johannes Khosa, said despite the annual increase in July, underlying conditions in the manufacturing sector remained weak, with output increasing by only 0.3 percent month on month on a seasonally adjusted basis and contracting 1.3 percent quarter on quarter in the three months to July.

They said the figures mainly reflected base effects due to the metal workers’ strike in 2014.

“The outlook for manufacturing remains poor, with the electricity crisis, rising production costs, low global commodity prices and patchy global and local demand likely to weigh on production in most major industries.”