GROWTH is expected to be registered in South Africa’s mining and manufacturing sectors for January, but the coming months are less certain owing to rand strength against the dollar, and China’s outlook, said Business Day citing analysts.
“While a rebound in the year-on-year growth rate in mining production is probably likely in January, the bigger picture for the mining industry remains challenging,” said BNP Paribas economist Jeffrey Schultz. The stronger currency in recent months had lowered the rand gold price considerably and resulted in many large gold miners to be loss-making.
Investec’s house view is that mining has grown at 5% year on year in January from December’s 0.1% year on year. “Lower statistical base factors in January 2017 account for some of the forecast lift,” Investec economist Laura Hodes said.
However, FNB chief economist Mamello Matikinca said: “We think any meaningful bounce-back in January is unlikely given the strengthening of the currency and several mine stoppages which could have affected production volumes.”