By Lehlohonolo Lehana.
Manufacturing and Mining output decreased in May respectively, according to official data from Statistics South Africa on Thursday.
Manufacturing production dropped 0.6 percent year-over-year in May, reversing a 4.9 percent increase in April.
The negative contributions to the annual decline were basic iron and steel, non-ferrous metal products, metal products and machinery, motor vehicles, parts and accessories, and other transport equipment, the agency said.
On a monthly basis, manufacturing production fell 3.2 percent from April, when it recovered by 5.2 percent.
While Mining production was flat in May 2024 compared with May 2023, below the Bloomberg consensus expectations of a 0.9% year-on-year increase.
Seasonally adjusted mining production decreased by 0.6% month-on-month in May. This followed month-on-month changes of 0.8% in April and -4.1% in March.
The main positive contributors were coal (7.0% and contributing 1.6 percentage points) and chromium ore (17.1% and contributing 0.7 of a percentage point).
Although manufacturing and mining are key indicators for South Africa’s GDP performance, the most recent BankservAfrica Economic Transactions Index Beti (BETI) shows that the country will likely avoid a contraction in Q2 2024.
The BETI, which measures the value of all electronic interbank transactions processed by BankservAfrica at seasonally adjusted real prices, moderated slightly in June.
“The BETI reached an index level of 135.8, slightly down by 0.5% from the 136.4 recorded in May,” says Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.
At this index level, the BETI is still 1.6% higher than in March, suggesting that economic performance bettered Q1 2024’s results and will lead to a positive outcome for Q2 2024.
South Africa’s GDP dropped by 0.1% in Q1 2024, but the BETI suggests the country should escape a technical recession (two straight quarters of retractions).