Manufacturing sector conditions 'dreary'

The Manufacturing Circle is a group of about 56 of SA's leading manufacturing companies.

The manufacturing sector, the second biggest contributor to GDP in SA, was "still undergoing a lot of stress", said Stewart Jennings, chairman of the Manufacturing Circle and CEO of the PG Group.

There was a drop in the number of manufacturers which characterised their current business environment as fragile/weak or stable. But despite the drop, the majority, 71% of respondents compared to 89% in the first quarter, still considered themselves to be between the two categories in the second quarter.

The bulletin showed that growth in sales increased at a slower pace in the second quarter, on the back of a downward shift in global growth and slower domestic demand.

Input costs were reported to have increased dramatically during the quarter, mainly due to higher administered and commodity prices.

Manufacturing sales remained positive during the quarter, the bulletin reported, but noted however that the growth in sales had risen at a slower pace.

Employment levels among surveyed manufacturers were down. Factors driving down employment included lower production and a volatile economic environment, the bulletin reported.