One of South Africa’s most important industries hits a speed bump

·11 Jul 2023

One of South Africa’s most important sectors, manufacturing, recorded a drop in production and sales in May.

Last month, Stats SA said that South Africa’s GDP grew by 0.4% in Q1 2023, and manufacturing was the main driver of growth, with output jumping by 1.5% – adding 0.2% to overall GDP growth.

Year-on-year, manufacturing production jumped by 2.5% in May 2023 compared to May 2022.

The largest contributions were made by the following divisions:

Motor vehicles, parts and accessories and other transport equipment (15,1% and contributing 1,4 percentage points)
Basic iron and steel, non-ferrous metal products, metal products and machinery (5,8% and contributing 1,2 percentage points)

Seasonally adjusted manufacturing production did, however, decrease by 1.3% from April 2023 to May 2023.

Before this, March recorded month-on-month growth of 3.8%, whilst April recorded growth of 0.7%.

That being said, seasonally adjusted manufacturing production jumped by 2.8% in the three months ended May 2023 compared to the prior three months.

During this period, seven of the ten manufacturing divisions reported positive growth.

The main contributors were:

Petroleum, chemical products, rubber and plastic products (6,9% and contributing 1,4 percentage points)
Basic iron and steel, non-ferrous metal products, metal products and machinery (4,6% and contributing 0,9 of a percentage point

Key growth rates in the volume of manufacturing production can be found below:

Another sales drop

However, manufacturing sales dropped by 2.7% in May 2023 compared to April 2023.

This follows a month-on-month drop of 0.5% in April 2023.

March boasted a month-on-month 3.9% increase in sales, meaning that seasonally adjusted manufacturing sales grew by 3,8% in the three months ended May 2023 compared with the prior three months.

The largest contributions were made from the following divisions

food and beverages (6,8% and contributing 1,6 percentage points)
petroleum, chemical products, rubber and plastic products (4,9% and contributing 1,0 percentage point).

Key growth rates in manufacturing sales at current prices can be seen below: