South African manufacturing drops by half as lockdown bites

JOHANNESBURG, South Africa – South Africa’s manufacturing industry contracted by 49.4% year-on-year in April during a nationwide lockdown which limited economic activity to essential services, official statistics showed Thursday, July 9.

StatsSA said motor vehicle production dropped by 98%, basic iron and steel production shrunk by 65.4%, while the production of petroleum, chemical products, and rubber and plastic products fell by 41.5%.

“The COVID-19 pandemic and lockdown regulations since 27 March 2020 have had an extensive impact on economic activity,” the statistics authority said in a statement.

“Manufacturing production decreased by 49.4% in April 2020 compared with April 2019.”

Food and beverage production, an essential service, was less impacted, declining by 19.4%.

The figures give some insight into the economic impact of the coronavirus outbreak on South Africa after the shutdown of the country began on March 27.

The economy had already slipped into its second recession in two years in the final quarter of 2019, before the virus arrived.

Finance Minister Tito Mboweni painted a bleak picture last month, saying that the economy was projected to shrink by 7.2% in 2020 as a result of the pandemic, the deepest slump in 90 years. 

South Africa’s stubbornly high unemployment rate rose one percentage point to 30.1% in the 1st quarter of this year, bringing the number of unemployed to 7.1 million.

President Cyril Ramaphosa has warned of mass job losses and “tough times” ahead as the continent’s most industrialized country braces for the economic fallout from its strict anti-coronavirus measures.

The president imposed a strict lockdown on March 27 to try to limit the spread of COVID-19 and prepare hospitals for an expected surge in cases.

But the move has cost the economy dearly, with Health Minister Zweli Mkhize warning that the country is yet to reach its peak.

The government has been gradually easing the lockdown in phases to bolster economic activity.

South Africa has the highest recorded number of coronavirus infections in sub-Saharan Africa, with 224,665 cases, including 3,602 fatalities. – Rappler.com