South African mining production fell in September, while manufacturing maintained a rebound from July’s riot-induced meltdown. It all points to a widely expected contraction in the quarter to the end of September and, with the onslaught of load shedding this quarter, hardly paints a picture of decent economic growth.
According to the latest data by Statistics South Africa (Stats SA), the domestic mining production decreased by 3.4% year-on-year in September 2021. This meant that over the course of the quarter, mining output was down 0.6% compared with the previous quarter so one of the drivers of economic growth will be a drag on the economy’s overall performance for the period.
Mineral sales which have been shooting the lights out on the back of surging commodity prices – also faltered, which is significant and concerning as the sector’s rising tax contribution has been one of the few things holding the fiscal ship of state afloat.
According to the report, the largest negative contributors were coal (-8.9%, contributing -2.2 percentage points); platinum group metals (-7.5%, contributing -1.7 percentage points); and gold (-6.9%, contributing -0.9 of a percentage point).
On the other hand, Stats SA pointed out that the domestic production of manganese ore (14.2%, contributing 1.2 percentage points) was a significant positive contributor. Stats SA added that seasonally adjusted mining production in South Africa decreased by 3.7% in September 2021 compared with August 2021. This followed month-on-month changes of -2.0% in August 2021 and 3.6% in July 2021.