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Manufacturing to Drag on Q4 GDP

SOUTH AFRICA
MNI (London)

SOUTH AFRICA DEC MANUFACTURING PROD +0.1% M/M (FCST -0.8%); NOV +1.4%r M/M

SOUTH AFRICA DEC MANUFACTURING PROD -4.7% Y/Y (FCST -3.6%); NOV -1.8%r Y/Y

  • Manufacturing production saw a marginal +0.1% m/m uptick in December, slowing from +1.4% m/m in November. December production levels were -4.7% below those of December 2021, largely due to a decline in petroleum/chemicals/plastics (-12.0% y/y), metals/machinery (-7.0%) and food/beverages (-2.2%).
  • Total manufacturing was -1.6% q/q in Q4, likely to in part reverse the Q3 boost.
  • Despite persistent load-shedding hampering production, the Absa Manufacturing PMI signaled expansion for the fourth consecutive month in January. Conversely, the S&P Global PMI flagged the slump in new orders and high inflation environment as a challenging start to 2023.
  • Naamsa expressed that higher-stage load shedding is generating a substantial drag on vehicle production, which fell by -1.5% q/q in Q4.
  • This evening the State of Nation Address (1700 GMT/1900 SAST) will be closely watched for possible fiscal support to assist firms with load-shedding issues.


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