Manufacturing and Mining Data for October Will Have Little Impact the JSE Today

By Sunburst Africa Editor

Johannesburg—Sunburst Africa–Today there will be two sets of data published by statistics South Africa on both manufacturing and mining production for October, 2014. Manufacturing production increased by 8, 0% in September 2014 compared with September 2013. The 8,0% year-on-year increase in manufacturing production in September 2014 was mainly due to higher production in the motor vehicles, parts and accessories and other transport equipment division (121,6% and contributing 5,8 percentage points). In September 2013 production in the automotive sector was adversely affected by industrial action. The food and beverages division (6, 1% and contributing 1, 6 percentage points) was also a large positive contributor to the year-on-year increase. One should expect better than 8% increase in manufacturing production for October, 2014. However, this will have a limited impact on the market as investors will be cautious of the impact of electricity cuts on the sector and overall economy

On the other hand, mining production increased by 5, 3% year-on-year in September 2014. The highest positive growth rates were recorded for iron ore (38, 3%), manganese ore (20, 1%) and diamonds (15, 1%). The main contributors to the 5, 3% increase were iron ore (contributing 5, 7 percentage points), coal (contributing 1, 8 percentage points) and manganese ore (contributing 1, 2 percentage points). PGMs remained a large negative contributor (contributing -4, 1 percentage points).

Seasonally adjusted mining production increased by 7, 0% in September 2014 compared with August 2014. This followed month-on-month changes of -2, 3% in August 2014 and 1, 6% in July 2014. The markets expect better than 5.3% increase in mining production for October as miners are almost fully recovered from the mid-year mining strike. However, trading is expected to be cautious on the JSE this morning following the weak rand and continuous power cuts affecting both mining and manufacturing.

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