South Africa's manufacturing improved in June 2023

Key Takeaways:

1. The manufacturing sector experienced impressive output growth in June 2023

2. Despite a slight decrease in manufacturing sales in June 2023 compared to the previous month, the overall quarter-to-quarter sales have improved.

3. The manufacturing sector saw a 1.2% increase in seasonally adjusted manufacturing production in June 2023, contrasting with a decrease in May 2023.

4. Petroleum, chemical products, rubber, and plastic products were notable contributors to the second quarter of 2023's growth, with a 4.1% increase and 0.9 of a percentage point contribution to the overall figure.

Manufacturing production relatively upbeat

The manufacturing sector has demonstrated an impressive performance in June 2023, showing a 5.5% increase in production (as per the STATSSA production and sales report for June 2023) compared to the same period in the previous year. This significant growth is primarily driven by key divisions such as motor vehicles, parts and accessories, and other transport equipment, which contributed 1.8 percentage points with a 19.5% increase.

Furthermore, basic iron and steel, non-ferrous metal products, metal products, and machinery have also contributed 1.6 percentage points, indicating a 7.5% increase. The food and beverages division, a key component of the consumer staples sector, also contributed 1.3 percentage points, showing a 5.8% increase.

On a month-on-month basis, seasonally adjusted manufacturing production in June 2023 increased by 1.2%, contrasting with a 1.3% decrease in May 2023 and a 0.9% increase in April 2023. This shows the sector's resilience and ability to bounce back from temporary downturns.

Moreover, the second quarter of 2023 witnessed a 2.3% increase in seasonally adjusted manufacturing production compared to the first quarter. This growth was led by nine out of ten manufacturing divisions. Notably, petroleum, chemical products, rubber and plastic products contributed 0.9 of a percentage point with a 4.1% increase.

Manufacturing sales data mixed

However, the same robust growth was not reflected in the manufacturing sales, which decreased by 0.5% in June 2023 compared to May 2023. This is following a 2.8% decrease in May and a 0.6% decrease in April.

Nevertheless, the second quarter of 2023 showed a slight increase of 0.6% in seasonally adjusted manufacturing sales compared to the first quarter. This was led by food and beverages with a 2.5% increase and basic iron and steel, non-ferrous metal products, metal products, and machinery with a 2.7% increase, each contributing 0.6 of a percentage point.