By Thanda Sithole
Total mining production, not seasonally adjusted, increased slightly by 0.7% y/y in April after declining by an upwardly revised 4.8% y/y (previously 5.8% y/y) in March. This outcome aligned with Reuters' consensus prediction. Seasonally adjusted output increased by 0.8% m/m, which was insufficient to reverse the 4.4% monthly decline in the prior month. The subdued monthly rebound, especially after the mining sector de-stocked in 1Q24, is concerning given that the country did not experience load-shedding in April. This likely reflects subdued, albeit stable, external demand and relatively weak commodity prices.
Despite the limited rebound in mining output at the start of the second quarter, the outcome is encouraging. Along with the strong manufacturing output growth of 5.2% m/m (5.3% y/y), this supports our view that GDP likely rebounded in 2Q24 after a mild 0.1% quarterly decline in 1Q24.
Outlook
Mining output is up by 0.6% year-to-date, and we remain cautiously optimistic about positive growth this year after the sector experienced annual contraction in the past two years. This optimism is grounded on expectations of a stable global growth environment and notable improvements in the domestic energy sector. Despite some improvements in freight rail, persistent inefficiencies in ports and rail network industries remain a significant constraint on the sector's productivity and profitability.
Selected sector analysis
The increase in mining output in April was narrow-based, reflecting an expansion in only four out of twelve mining divisions. Growth was recorded in the following divisions:
The following eight divisions experienced a contraction in output:
