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The manufacturing sector kicked off the third quarter with strong growth.
The manufacturing sector kicked off the third quarter with strong growth.

Manufacturing sector shows good growth in the third quarter

ECONOMIC NEWS

By Sunita Menon - Sep 12th 2018, 08:45

The manufacturing sector kicked off the third quarter with strong growth. 

Production in the sector increased by 2.9% in July compared with a year ago, after a 0.6% increase in June.

The largest contributions were made by the food and beverages sector (5.8% and contributing 1.5 percentage points); motor vehicles, parts and accessories and other transport equipment (8.3% and contributing 0.6 of a percentage point); and wood and wood products, paper, publishing and printing (3.9% and contributing 0.4 of a percentage point).

Seasonally adjusted manufacturing production increased by 1.6% in July compared with June, following month-on-month changes of 0.2% in June and 1.3% in May.

Compared to the flat growth the sector saw in the second quarter, seasonally adjusted manufacturing production increased by 1.9% in the three months ended July 2018 compared with the previous three months with six of the 10 manufacturing divisions reporting positive growth rates over this period.

In June, the Absa purchasing managers’ index (PMI), which gauges activity in the manufacturing sector, breached the 50 neutral-level, after two months of contractions. The index jumped to 51.5 in July after falling to 47.9 in June.

The PMI tends to be a reliable forecaster of the monthly manufacturing sales and output figures, which Stats SA publishes about two months later.

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