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The SA Daily 15 August 2018

Mining surprises in June

  • Mining production for June has surprised to the upside at 2.8% y/y, above Bloomberg expectations of -0.9% y/y, and also up from the upwardly revised -1.8% y/y (previously -2.6% y/y) in May.
  • At a quarterly growth rate aligned with official GDP data, mining production was up 0.8% q/q (seasonally adjusted) in Q2:18 after the contraction of 2.5% q/q in Q1:18. Therefore, the SA mining sector most likely contributed positively to real GDP growth in Q2:18.
  • Looking ahead, we still see a relatively bleak mining sector over the medium term due to the global trade war and ongoing local policy uncertainty. Also, base effects won’t have assisted mining production July. The Standard Bank economy-wide PMI too paints a rather bleak start to Q3:18, having slipped to 49.3 pts in July from 50.9 pts in June (see June mining production up 2.8% y/y of 14 August, by Thanda Sithole).

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