Strong Recovery In South African Mining Sector
Today’s Mining Production numbers from South Africa easily serve to confirm yesterday’s reported strong improvement in the Industrial sector. Mining Production for the month of September is showing a 5.3% year on year improvement, this sharply reverses the August reading of a fall of -9.2%. The month on month increase was 7.0% and this compares to an August contraction of -2.3% in one of key sectors in South Africa’s economy.
Such a strong recovery in the mining sector is vital to getting the South African economy back on track. A protracted period of industrial unrest within this sector during the first two quarters of this year caused untold damage to the countries economy, fortunately it is beginning to look as though this damage will not be lasting. The numbers from yesterday and today point to a strong rebound in the two sectors that drive the nation’s economy, it will however take more than one month’s readings to fully confirm that these sectors are undergoing more than just a rebound bounce.
Despite the positive news from the core of the South African economy, it is looking like the recovery has come a little too late to save the economy posting it’s lowest annual growth rate since the height of the economic crises in 2009. South Africa very narrowly avoided entering a technical recession, as measured by two quarters of negative GDP growth, when the latest quarterly GDP number was revised back into positive territory. External agencies have now slashed the full year growth rate for 2014 from 2.7% to just 1.4%. Official government predictions are expected to follow suit however given the recent pick up in activity it is expected that forecasts for 2015 and 2016 will remain at their current levels of 2.5% and 2.8% respectively, an early projection of 3% for 2017 still stands.
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