Mining sector sales slow

File picture: Ivan Alvarado

File picture: Ivan Alvarado

Published Oct 8, 2015

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Johannesburg - Although the mining sector improved its output in August compared with a year ago - the manufacturing sector has remained flat - reflecting the overall state of the economy and lower business confidence.

Figures released by Statistics SA on Thursday show mining production increased 3.8 percent year-on-year in August, driven by platinum group metals (63 percent) and diamonds (24 percent).

Weighing on the results were commodities that are also experiencing pressure, such as iron ore saw output drop 17.1 percent, and coal, which declined 5.3 percent, notes the statistics agency.

However, seasonally adjusted mining production dropped 1.1 percent in August compared with July. This, says Stats SA, followed month-on-month changes of minus 0.8 percent in July and 2.4 percent in June.

Seasonally adjusted mining production declined 3.3 percent in the three months to August compared with the previous three months.

The main contributor to this drop was platinum group metals, a commodity that is under pricing pressure and at multi-year lows, iron ore, and coal.

Stats SA also noted mineral sales dropped 1.5 percent year-on-year in July. The largest negative contributions to this decrease was gold, 1.9 percent down, iron ore, 24 percent down and nickel, which dropped 51.9 percent.

Platinum group metals lifted sales 32.7 percent, the agency notes.

Seasonally adjusted mineral sales at current prices decreased 7.2 percent month-on-month, it adds.

Meanwhile, manufacturing production dropped 0.2 percent in August year-on-year, mostly driven by the basic iron and steel, non-ferrous metal products, metal products and machinery division sectors.

Positive contributions came from petroleum, chemical products, rubber and plastic products as well as food and beverages, the agency says.

The latest Barclays and BER Purchasing Managers’ Index (PMI) shows the manufacturing space is currently flat as the September seasonally adjusted index remained virtually unchanged at 49 index points, marginally up from 48.9 in August.

Stats SA notes seasonally adjusted manufacturing production increased by 0.4 percent month-on-month, but dropped 0.3 percent in the three months to August.

The main contributor to the 0.3 percent decrease was the basic iron and steel, non-ferrous metal products, metal products and machinery division, it says.

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