Manufacturing production slips in February, load shedding remains a risk

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February manufacturing declined 2.1% year-on-year, data from Stats SA shows.
February manufacturing declined 2.1% year-on-year, data from Stats SA shows.

Manufacturing production declined by 2.1% on a year-on-year basis in February, data from Stats SA shows.

Five out of ten manufacturing divisions reported a slowdown in activity.

The biggest negative contributors to production were the petroleum, chemical products, rubber and plastics division, which fell by 8.4%; the basic iron and steel division, which declined 4.8%; and the furniture and other manufacturing division, which fell by 17%.

However, the motor vehicles and transport equipment division was the largest positive contributor, having increased production by 13.2%.

On a month-on-month basis, February production fell by 1.2%. 

Investec economist Lara Hodes warned that rotational load shedding remains a key risk to production.

Hodes also noted that the industry is impacted by raw material supply shortages due to global supply constraints - which is contributing to higher input costs.

The IHS Markit Purchasing Managers' Index (PMI) released on Wednesday had shown that there were increasing inflationary pressures during March.

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