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The SA Daily 19 October 2018

August mining slumps but Q3 looks set for a recovery

  • Total mining production contracted further, by 9.1% y/y in August, after an upwardly revised 4.1% y/y contraction in July (from -5.2%).
  • Mining production declining implies that our 0.9% real GDP growth forecast for 2018 faces downside risks.
  • However, mining’s impact on GDP should be countered by manufacturing production and retail sales. The mining sector accounts for 7.1% of GDP; the manufacturing sector and retail trade sectors account for 12.0% and 6.1% respectively. Therefore, growth likely recovered in Q3:18, assuming that September manufacturing and sales do not disappoint.
  • The upcoming September data will confirm how SA fared in Q3:18 (see August mining production declined 9.1% y/y of 18 October, by Thanda Sithole).

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