CONFIDENCE among South Africa's manufacturers improved in the third quarter, indicating that the worst of the slump in the sector may be over, a survey showed yesterday.
The Bureau for Economic Research said the manufacturing business confidence index went up to 22percent from 11percent in the second quarter.
Slump may be over
"The survey shows a modest yet clear change of trends when compared to the first and second quarter. While manufacturing activity is still under pressure, the results confirm that the worst is behind us," BER economist Christelle Grobler said.
Manufacturing has been hard hit by depressed local and global demand on the back of an international economic downturn, shrinking by 10,9 percent in the second quarter, from a record 22,1 percent decline in the first three months of 2009.
As the second biggest contributor to the economy at about 14 percent of gross domestic product, it weighed on the economy, which fell by 3 percent quarter-on-quarter in the second quarter, from a 6,4 percent contraction in the first quarter.
Sales volume down
The BER said although domestic sales volume remained negative, the rate of decline was slower and "foreign demand conditions also appeared to be improving, supporting the notion of the beginning of a global recovery".
Manufacturing employment trends also took a turn for the better, with jobs shrinking at a slower rate than before.
The SA unemployment rate climbed to 23,6 percent in the second quarter as the biggest economy on the continent shed jobs on the back of the country's first recession in 17 years. - Reuters