Good news for one of South Africa’s most important sectors

Manufacturing, one of South Africa’s best-performing sectors in 2023 so far, saw production grow further in April.

Stats SA published data earlier this week showing that South Africa’s GDP grew by 0.4%, avoiding a technical recession following a 1.3% decline in Q4 2022.

Manufacturing was the main growth driver, with output jumping by 1.5%, adding 0.2 of a percentage point to GDP growth.

The production of food and beverages was the main reason for the industry’s positive growth.

Manufacturing data for April, published by Stats SA, shows that manufacturing activity remained strong in the month.

Year-on-year, manufacturing jumped 3.4% from April 2022 to April 2023.

The following areas were the main reason for growth:

• basic iron and steel, non-ferrous metal products, metal products and machinery (5,3% and contributing 1,1 percentage points)
• food and beverages (4,6% and contributing 1,0 percentage point)
• petroleum, chemical products, rubber and plastic products (2,8% and contributing 0,6 of a percentage point)
• motor vehicles, parts and accessories and other transport equipment (5,0% and contributing 0,5 of a percentage point).

Moreover, on a month-to-month basis, manufacturing activity in April increased by 0.5% from March 2023.

This was the second consecutive month-on-month growth after March recorded a manufacturing output increase of 3.4%, albeit from a 1.6% drop in February.

In addition, seasonally adjusted manufacturing production jumped by 1.2% in the three months ended April 2023 compared to the previous three months.

In the three months ended April 2023, four of the ten manufacturing divisions saw growth, with the largest contribution being made by the petroleum, chemical products, rubber and plastic products division (7,9% and contributing 1,6 percentage points).

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

Not all great news 

Despite the increase in manufacturing output, seasonally adjusted manufacturing sales dropped by 0.3% month-on-month in April.

This followed month-on-month growth of 1.9% and 3.7% in February and March, respectively.

However, Seasonally adjusted manufacturing sales increased by 5.0% in the three months ended April 2023, with the largest contribution coming from petroleum, chemical products, rubber and plastic products (1.5% and contributing 2.7 percentage points); and food and beverages (6.4% and contributing 1.5 percentage points).

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

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