Mining leads S.Africa's Q2 growth higher

PRETORIA (Reuters) - South Africa's second-quarter economic growth quickened just slightly less than the market expected, boosted by a surprise jump in mining and suggesting the central bank could hold rates steady next month.

Africa's biggest economy grew by 3.2 percent on a quarter-on-quarter basis and adjusted for seasonal factors in the second quarter, just below market expectations of 3.3 percent growth, Statistics South Africa said on Tuesday.

On a year-on-year and unadjusted basis, growth jumped to 3 percent from 2.1 percent in the first quarter, overshooting market expectations of 2.7 percent.

Economists had expected growth to accelerate to 3.3 percent quarter-on-quarter but manufacturing and electricity dragged on the number.

Manufacturing output contracted by 1 percent in the second quarter from a 7.7 percent expansion previously.

On the other hand, mining registered a surprise 31.2 percent jump, coming off a low base of -16.8 percent in Q1.

The central bank's Monetary Policy Committee (MPC) meets in late September and the bank may choose to keep rates steady after a 50 basis point reduction in July and as it waits to see the effect of mining labour woes on the economy.

"The strong number suggests that the MPC will remain cautious on the domestic demand outlook but will still find it hard - and too early - to cut in September, with November the more likely time" said Peter Attard Montalto of Nomura, citing the likelihood of more negative data by the November.

South Africa's platinum belt has been hit by labour clashes that left 44 people dead at a Lonmin mine this month, while gold producers are facing a threat from wage hike demands.

The outlook for growth is weak, with the Finance Minister Pravin Gordhan saying he will cut his 2.7 percent growth forecast in October.

The festering euro zone crisis is likely to continue its drag on exports, while domestic labour strife should depress growth in the third quarter.

"Looking ahead to the third quarter, it is safe to say that the strikes taking place in platinum at the moment, coming out of Lonmin, mean that mining production in the third quarter is going to do very poorly," said Gina Schoeman, lead economist at Absa Capital.

Source: http://news.yahoo.com/africa-q2-economic-growth-3-2-pct-q-094510526--business.html

the weeknd echoes of silence gio gonzalez san francisco fire patti labelle the weeknd the weeknd payroll tax