SA mining, manufacturing data fall on annual basis in January, latest signs of economic stagnation

The mining data were a mixed bag, but the headline number was a decrease in production of 1.9% in the year to January, the 12th consecutive month of annual contraction. The best that can be said was that it was better than the Bloomberg consensus forecast of a 2.8% shrinkage and that it was the shallowest annual decline over the past 12 months. 

It still points to a sector with the sun setting over it, which has largely been the case the past few years. Mining production fell 7.2% in 2022 after an 11.6% increase in 2021, which was mostly driven by a rebound from the lockdowns of 2020, when output shrank 10.4%. 

“After construction, mining is the second-worst performing sector, remaining 8.1% smaller compared with pre-pandemic levels,” Jee-A van der Linde, a senior economist at Oxford Economics Africa, said in a commentary on the data. 

But mineral sales at current prices rose 6.8% year on year, which would largely have been a function of prices and perhaps delayed sales of stockpiles and that kind of thing. 

For manufacturing, there was a year-on-year slump in production of 3.7% in January. A number of factors probably explain that decline, but the surge in rolling blackouts to relentless levels has to be the number one reason. And it was the third consecutive month of annual decline in manufacturing output, which strongly suggests a sector that is floundering.