South African manufacturing output slows

Government statistics revealed that the South Africa’s gold output for May has gone down to 11.6 percent compared to the same period in 2007, although overall mineral production has increased to 0.6 percent as non-gold minerals rise by 2.6 percent.

The country itself is struggling across a variety of sectors due to the sharp rise in fuel prices and energy blackouts ahead of the preparations for the 2010 World Cup.

The state-owned power utility Eskom suffered a near collapse in the electricity grid in January, causing a five-day countrywide mine shutdown which has affected production.

In a bid to repair its economy, the government has indicated that it will reduce expenditure on imported fuels by switching to natural gas and so far has begun by brining in gas-operated buses for public transport.

The economy has also been hit by factory production, which accounts for 16 percent of the economy with a revised figure of 10.2 percent growth in April. According to the Investec Purchasing Managers Index, higher interest rates and record oil prices are the main cause.

The rand rose to 7.6753 per dollar although it has fallen by 10.5 percent against the US currency so far this year, the worst performer of 16 major currencies.

Story link: South African manufacturing output slows