THANDI XABA
Manufacturing production summed up to a -2% year on year in April this year from an upwardly revised 4% in March, rounding off a poor performance for the production side of the country’s economy.
Industry Economist, Jason Muscat says the slow demand is mainly because of the power outages and a reflection of a weak demand.
"That’s largely as a result, not only of slow demand but also electricity disruptions. We have seen a very close correlation between manufacturing outputs and what we see in terms of electricity and production.
And as we know electricity was most severe in April and that had an impact on manufacturing output," he says.
Furthermore Muscat says the poor performance was broad based across manufacturers and reflects not only weak demand, but also the economy’s inability to take advantage of a weak rand due to the labour and electricity constraints.
While domestic vehicle sales remain under considerable pressure, automotive exports remain one of the better performing sectors.
He adds that it’s expected the weakness to persist for the balance of the year. Motor vehicle production expanded over 8% in the month largely as a result of better demand from Europe and the US.
