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APRIL WAS WORST MONTH SINCE 2004 - statistics sa

By Kea' Modimoeng sowetanbiz@avusa.co.za | 2009-06-11 00:00:00.0 | COMMENTS [ 0 ]

APRIL'S worse-than-expected manufacturing data, which was released yesterday, will have a dire effect on the second quarter's gross domestic product figures, economists said.

Statistics South Africa reported yesterday that manufacturing production in April declined 21,6percent year-on-year, compared with March's 11,8percent drop.

April's decline was the worst since January 2004's output levels.

Mike Schussler, a director at economists.co.za, yesterday said the year-on-year decline was worse than most could have expected and further showed that the country "was in an official recession".

"Any decrease more than 20percent is huge and the data shows that we lost all the growth accumulated in the last five years," Schussler said.

He said the iron and steel sectors depended mostly on exports and this was another disadvantage, especially in tough economic times.

Schussler cautioned that the slowdown in manufacturing would have a negative impact on the second quarter Gross Domestic Product figures, which Stats SA would release in August.

According to Stats SA the lower production in April 2009 could be partly attributed to a shorter working month in April as compared with April last year owing to the Easter period that switched from March last year to April this year.

The 21,6percent decrease was mainly due to lower production in the basic iron and steel, non-ferrous metal products, metal products and machinery division decline of 26,4percent, followed by motor vehicles, parts and accessories and other transport equipment which declined by 49percent.

The petroleum, chemical products, rubber and plastic products division declined by 15,2percent.

Luke Doig, Credit Guarantee economist, said: "The figures give evidence of the extent of the economic slowdown.

"The extra number of public holidays in April and the international drop in demand also contributed to the overall decline."

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