(Updates with comment from analyst in third paragraph.)
Jan. 12 (Bloomberg) -- South African manufacturing growth accelerated in November, strengthening the recovery in Africa’s biggest economy and easing pressure on the central bank to cut interest rates.
Factory output increased 2.6 percent from a year earlier, compared with a revised 1.2 percent in October, Pretoria-based Statistics South Africa said on its website today. The median estimate in a Bloomberg survey of six economists was 1.3 percent. Output rose a seasonally adjusted 2.9 percent in the month.
“We are gaining some traction,” Shireen Darmalingam, an economist at Standard Bank Group Ltd., said in a telephone interview from Johannesburg today. “We shouldn’t rule out that there are some risks to the sector still. The economy is going to be at the mercy of what is going on in the euro zone.”
Consumer spending and business confidence are gaining as growth recovers from its slowest pace in about two years in the second and third quarters of 2011. The Reserve Bank held the repurchase rate at a 30-year low for the whole of last year to support the economy through a worsening debt crisis in Europe, which buys about a third of South Africa’s manufactured exports.
The rand rallied after the data was released, gaining 1.1 percent to 8.0298 per dollar at 1:38 p.m. in Johannesburg, from 8.0583 earlier. The currency has gained 0.7 percent this year.
The purchasing managers’ index rose for a fourth month in November, improving the outlook for factory production, Kagiso Tiso Holdings said on Dec. 1. The rand’s 3.1 percent drop against the dollar in November also helped lower prices for manufactured goods, Darmalingam said.
A contraction in manufacturing, which accounts for about 15 percent of the economy, for a second consecutive quarter in the three months through September limited the economy’s expansion to 1.4 percent. Finance Minister Pravin Gordhan in October cut the government’s growth forecast for this year to 3.4 percent from 4.1 percent.
--Editors: Ben Holland, Nasreen Seria
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