The mining and manufacturing sectors are expected to have continued underperforming in August‚ according to Investec economist Kamilla Kaplan.
The manufacturing production data for August is scheduled for release on Tuesday while the August mining production data is due for release on Thursday.
“Mining production is forecast at -3.8% year on year (y/y) versus a prior -5.4% y/y‚ whilst growth in manufacturing production is seen easing to 1.4% y/y from 1.9% y/y previously‚”says Kaplan.
She points out that production has been inhibited by relatively subdued aggregate demand conditions.
“On the domestic front‚ GDP growth is expected to be barely positive this year‚ on particularly weak household consumption demand and falling rates of private sector investment.
“The external demand environment remains broadly unfavourable. According to the World Bank ‘(w)eak aggregate demand in advanced economies‚ the transition to slower and more domestically-oriented growth in China‚ and contraction in major commodity exporters continued to weigh on global trade in the first half of the year’. Global trade momentum is expected to stagnate this year.
“In addition‚ although commodity prices rebounded from lows reached in January‚ the pace of increase has subsided since the second quarter. In view of the weak global growth prospects and continued oversupply in some key commodity markets‚ commodity prices are expected to remain low‚” Kaplan adds.
Activity expected to have remained suppressed in mining and manufacturing sectors in August
The mining and manufacturing sectors are expected to have continued underperforming in August‚ according to Investec economist Kamilla Kaplan.
The manufacturing production data for August is scheduled for release on Tuesday while the August mining production data is due for release on Thursday.
“Mining production is forecast at -3.8% year on year (y/y) versus a prior -5.4% y/y‚ whilst growth in manufacturing production is seen easing to 1.4% y/y from 1.9% y/y previously‚”says Kaplan.
She points out that production has been inhibited by relatively subdued aggregate demand conditions.
“On the domestic front‚ GDP growth is expected to be barely positive this year‚ on particularly weak household consumption demand and falling rates of private sector investment.
“The external demand environment remains broadly unfavourable. According to the World Bank ‘(w)eak aggregate demand in advanced economies‚ the transition to slower and more domestically-oriented growth in China‚ and contraction in major commodity exporters continued to weigh on global trade in the first half of the year’. Global trade momentum is expected to stagnate this year.
“In addition‚ although commodity prices rebounded from lows reached in January‚ the pace of increase has subsided since the second quarter. In view of the weak global growth prospects and continued oversupply in some key commodity markets‚ commodity prices are expected to remain low‚” Kaplan adds.
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