South Africa's economy is moving at two speeds. Fresh data from Statistics South Africa shows the country's mines roaring ahead in April even as its factories went into reverse — a split that captures the uneven nature of the recovery.
Mines dig deeper
Total mining output rose 8.2% in April, a sharp acceleration from the 2.5% increase recorded in March. The pick-up adds to a run of good news for the resources sector, which has been buoyed by firm commodity prices — gold in particular — and helped underpin the country's recent surge in export earnings.
It is a timely boost. Mining remains one of South Africa's most important sources of foreign exchange and tax revenue, and a stronger production reading feeds directly into the trade and current-account figures that have lately surprised on the upside.
Factories stumble
The picture in manufacturing was far less rosy. Factory production fell 2.9% year on year in April, reversing a 1.5% gain in March. Manufacturing has long been the soft underbelly of the South African economy, weighed down by patchy demand, logistics bottlenecks and the lingering effects of higher input costs.
The divergence matters because manufacturing is a bigger employer than mining and a key barometer of broader industrial health. A contraction there tempers the optimism flowing from the strong mining and trade numbers, and is a reminder that the recovery is far from broad-based.
For policymakers, the two-speed reading sharpens an old dilemma: how to translate commodity windfalls into durable, job-rich growth in the rest of the economy. With inflation data due shortly and the Reserve Bank watching closely, the health of the productive sector will remain firmly in focus.
Compiled by Business Bagel from reporting by BusinessTech, citing Statistics South Africa.
