Pretoria South African manufacturing production contracted in March as an economic slowdown in Europe damped demand for exports and a stronger rand boosted the cost of shipments.
Factory output fell 2.7 per cent from a year earlier, compared with revised 4 per cent expansion in February, Pretoria-based Statistics South Africa said on its website yesterday. The median estimate in a Bloomberg survey of five economists was 3.3 per cent. Output declined a seasonally adjusted 4.3 per cent in the month.
A drop in production may limit the recovery in Africa’s biggest economy from recession in 2009 and ease pressure on the central bank to raise interest rates this year. Europe will probably enter another recession this year as governments cut spending to help ease a debt crisis that began with Greece more than two years ago. Europe buys about a third of South Africa’s manufactured goods.
South African manufacturers “remain at the mercy of economic conditions in the Eurozone,” Standard Bank Group, Africa’s largest lender, said in emailed comments before the release of yesterday’s data.
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The rand gained 5.4 per cent against the dollar in the first three months of this year, eroding the competitiveness of South Africa’s exports and adding to the effect of the slowdown in Europe.
South Africa’s unemployment rate rose to 25.2 per cent in the first quarter from 23.9 per cent in the previous three months.
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Category: Africa News