PREFACE - nda.agric.za · Paper and paper products 4,9 0,0 8,3 1,7 Furniture and other manufacturing 9,0 1,2 -5,8 5,4 Source: UNIDO (2015) and Quantec (2015) Table 2.3 shows the year-on-year

1

PREFACE

The agro-processing industry is among the sectors identified by the Industrial Policy Action

Plan (IPAP), the New Growth Path and the National Development Plan for its potential to spur

growth and create employment because of its strong backward linkage with the primary

agricultural sector. DAFF established a Directorate: Agro-processing Support in 2011 to

complement the interventions undertaken by several government departments, notably the

Department of Trade and Industry. One of the main purposes of the directorate is to provide

timely and updated economic information regarding agro-processing in order to monitor the

performance of the sector and provide an insight into the effects of economic policies and

exogenous factors. To achieve this purpose, the directorate has started to publish a regular

quarterly review of the agro-processing industry.

This publication ‘’Quarterly Economic Review of the Agro-processing Industry in South Africa:

July to September 2015’’ evaluates the performance of the nine divisions within agro-

processing during the third quarter of 2015. These divisions, which are in line with the Standard

Industrial Classification are: tobacco, textiles, wearing apparel, leather and leather products,

footwear, wood and wood products, paper and paper products, rubber products and

furniture. The main economic indicators reviewed are the changes in producer price,

production volume, value of sales, capacity utilisation by large enterprises, formal

employment and trade balance. A sector specific outlook is also presented for selected

divisions.

Any comments and suggestions on the content of the publication are most welcome.

Victor Mahlogedi Thindisa

Director: Agro-processing Support

Pretoria

Disclaimer: The Department of Agriculture, Forestry and Fisheries did everything to ensure the accuracy of the

information reported in this publication. The department will, however, not be liable for the results of action based

on this publication.

2

CONTENTS

PREFACE .................................................................................................................................... 1

EXECUTIVE SUMMARY .............................................................................................................. 3

1. INTRODUCTION ..................................................................................................................... 4

2. OVERVIEW OF THE GLOBAL ECONOMY ........................................................................... 3

3. STATE OF THE DOMESTIC ECONOMY ................................................................................. 7

4. THE AGRO-PROCESSING INDUSTRY ................................................................................... 9

4.1 TOBACCO .......................................................................................................... ………10

4.2 TEXTILES .............................................................................................................................. 11

4.3 WEARING APPAREL ...................................................................................................... 15

4.4 LEATHER AND LEATHER PRODUCTS ............................................................................ 19

4.5 FOOTWEAR .................................................................................................................... 21

4.6 WOOD AND WOOD PRODUCTS ................................................................................ 24

4.7 PAPER AND PAPER PRODUCTS ................................................................................... 28

4.8 RUBBER PRODUCTS ....................................................................................................... 31

4.9 FURNITURE ...................................................................................................................... 34

5. CONCLUSION ..................................................................................................................... 38

REFERENCES ............................................................................................................................ 38

EXECUTIVE SUMMARY

Compiled by: Agro-processing Support Directorate

Department of Agriculture, Forestry and Fisheries

Sefala Building

503 Belvedere Street, Arcadia, South Africa

All correspondence can be addressed to:

Director: Agro-processing Support

Private Bag X416, Pretoria 0001, South Africa

Tel.: +27 (12) 319 8457

Fax: +27 (12) 319 8093

E-mail: [email protected]

This publication is also available on the internet at: http://www.daff.gov.za

mailto:[email protected]

http://www.daff.gov.za/

3

EXECUTIVE SUMMARY

The South African economy showed a moderate growth of 0,7% in the current quarter; this is

mainly due to the negative growth rate of the secondary and the mining sector. The

production volume of most of the divisions in the agro-processing industry increased as

compared to the previous quarter. Among the divisions that increased volume of production

in the quarter under review are: paper and paper products, rubber, wearing apparel,

beverages and furniture divisions.

Due to the growth in production volume of most of the agro-processing products, the

nominal value of sales of agro-processing increased by 3,3% compared to the previous

quarter of 2,5%. Therefore, the total value of sales increased from R147 893,3 million in the

preceding quarter to R152 757,4 million during the third quarter of 2015. The divisions that

showed growth of sales are the following: paper and paper products (6,5%), leather and

leather products (6,0%), rubber (5,1%), wearing apparel (4,8%), food (2,8%), furniture (1,3%),

footwear (0,9%), textiles (0,7%) and wood and wood products (0,3%) divisions.

Owing to an increase of agro-processing export compared to the import, the trade surplus of

agro-processing products widened from R7 532,1 million in the previous quarter to R11 942,1

million during the third quarter of 2015. The agro-processing products’ divisions that showed a

positive export growth are: footwear (24,6%), paper and paper products (17,2%), furniture

(14,5%), beverages (13,1%), wearing apparel (10,0%), food (9,8%), tobacco (9,5%) and

rubber (6,1%) divisions. However, the textile and leather and leather products have shown a

negative growth of 1,2% and 0,1%, respectively.

During the third quarter of 2015, the agro-processing industry shed 453 formal jobs as

compared to the preceding quarter loss of 6 501 jobs. The improvement in the job recovery

can be attributed to the increase in export and production increases. The following agro-

processing industries shed jobs: food (2 847), furniture (135), beverages (98), wearing apparel

(39) and leather and leather products (15), while (wood and wood products) and textiles

divisions created 2 012 and 667 jobs, respectively.

1. INTRODUCTION

Global growth remains moderate and once again more so than predicted a few months

earlier. Although country-specific shocks and developments play a role, the persistent,

modest pace of recovery in advanced economies and the fifth consecutive year of growth

declines in emerging markets suggest that medium-term and long-term common forces are

also importantly at play. Growth in emerging markets and developing economies is

projected to rebound in 2016. The South African economy can be seen trying to avoid

recession by recovering from a contraction of the previous quarter in spite of the decrease in

the manufacturing and mining sectors economic growth rates. This quarterly review assesses

the economic performance of the agro-processing industry, given growth increases of both

global and domestic economic activities during the fourth quarter of 2015.

The quarterly review is organised as follows: section two and three in turn summarise the

global economy and the state of the domestic economy during the third quarter of 2015.

Section four provides the impact of the global and domestic economy on the nine divisions

of the agro-processing industry in brief. The review presented in this section assesses how the

performance of the global and domestic economy during the quarter affected the

4

producer price, production volume, sales, capacity utilisation, trade and employment of

each division. In addition, an outlook for the third quarter of 2015 is presented for selected

divisions. The outlook presents the expectation of domestic sales, export, investment and

employment, among others, for the next quarter compared to their levels a year ago.

2. OVERVIEW OF THE GLOBAL ECONOMY

Growth in advanced economies is projected to increase modestly this year and next year.

This year’s developments primarily reflect a strengthening of the modest recovery in the Euro

area and a return to positive growth in Japan, supported by declining oil prices,

accommodative monetary policy and in some cases, currency depreciation. Growth in

emerging markets and developing economies is projected to rebound in 2016.

Global activity is projected to gather some pace in 2016. In advanced economies, the

modest recovery that started in 2014 is projected to strengthen further. In emerging markets

and developing economies, the outlook is projected to improve. In particular, growth in

countries in economic distress in 2015 (including Brazil, Russia, and some countries in Latin

America and in the Middle East), while remaining weak or negative, is projected to be higher

next year, more than offsetting the expected gradual slowdown in China.

Table 2.1: Overview of the world economic outlook projections (percentage change)

Source: IMF (2015)

In emerging markets, the scope for macroeconomic policies to support growth, if needed,

varies across countries and regions, but space is limited in countries with external

vulnerabilities. There is also a general, urgent need for country-specific structural reforms to

Projections

2014 2015 2016

World Output 3,4 3,1 3,6

Advanced Economies 1,8 2,0 2,2

US 2,4 2,6 2,8

Euro area 0,9 1,5 1,6

Japan -0,1 0,6 1,0

Emerging markets and developing

economies

4,6 4,0 4,5

China 7,3 6,8 6,3

India 7,3 7,3 7,5

Russia 0,6 -3,8 -0,6

Brazil 0,1 -3,0 -1,0

Sub-Saharan Africa 5,0 3,8 4,3

South Africa 1,5 1,4 1,3

5

strengthen growth potential or make growth more sustainable locally. For advanced

economies, consumer price inflation is expected to stagnated at 2,4% from 2015 to 2016.

Table 2.2: Seasonally adjusted estimated growth rates of world manufacturing output, 2015: Q3

Share in the world

manufacturing

value added (2010)

Growth rate

compared to the

previous quarter

Growth rate compared

to the same period of

previous year

World 100 -0,6 2,7

Industrialised economies 67,6 0,2 1,3

North America 22,4 0,8 1,8

Europe 27,4 0,0 2,0

East Asia 17,2 -0,9 0,2

Developing and emerging

industrial economies (by

development group)

32,3 -1,8 5,0

China 15,3 -2,5 7,0

Emerging industrial economies 13,8 -0,3 1,1

Other developing countries 2,7 0,8 3,5

Developing and emerging

industrial economies (by region) 32,2 -1,8 5,0

Africa 1,5 1.4 0,1

Asia and Pacific 21,7 -2,2 6,6

Latin America 5,8 -1,2 -3,2

Others 3,3 0,6 3,8

Source: UNIDO (2015) and Quantec (2015)

Table 2.2 above represents the world manufacturing output growth rate during the third

quarter of 2015. Compared to the same period of the previous year (year-on-year), world

manufacturing output contracted by 0,6% as a result of a negative growth of China (-2,5%),

the Asian and Pacific regions (2,2%), developing and emerging industrial economies (by

region) (1,8%), East Asia (1,8%) and Latin America (-1,2%). The main contributor during the

period to growth of the world manufacturing output was the 67,6% growth of industrialised

economies, which is largely directed by the growth rates of Africa, North America, other

developing countries and industrialised economies.

Table 2.3: Seasonally adjusted estimated growth rates of output by the manufacturing sector, 2015: Q3

(in % compared with the same period of the previous year).

Developing and

emerging

industrialised

economies

Industrialised

economies

South Africa World

Food and beverages 4,4 2,8 1,6 3,6

6

Textiles 4,1 1,5 -0,3 2,6

Wearing apparel, fur 3,1 5,0 -0,8 3,6

Leather, leather products

and footwear

2,1 -4,3 5,5 (leather),

footwear (-13,3)

0,3

Wood products 5,5 0,5 9,5 2,2

Paper and paper products 4,9 0,0 8,3 1,7

Furniture and other

manufacturing

9,0 1,2 -5,8 5,4


Table 2.3 shows the year-on-year seasonally adjusted growth rates of selected agro-processing

industries in the world for the third quarter of 2015. The South African food, leather and leather products,

wood and wood products and paper and paper products for the agro-processing divisions performed

well above both developing and emerging industrialised economies, while furniture and other

manufacturing, footwear, wearing apparel and fur and textiles performed below developing and

immerging industrialised economies.

Table 2.4: Seasonally adjusted estimated growth rates of output by manufacturing sector, 2015: Q3 (in

% compared to 2015: Q3)

Developing and

emerging industrialised

economies

Industrialised

economies

South Africa World

Food and beverages -5,7 0,4 -0,0 -2,6

Textiles -4,3 -1,3 -0,4 -3,6

Wearing apparel, fur -4,8 -0,6 3,8 -3,8

Leather, leather products

and footwear

-3,2 1,9 -1,2 (leather)

-0,9

(footwear)

-1,9

Wood products -2,6 0,7 -0,5 -0,5

Paper and paper products -2,2 0,1 7,2 -0,8

Furniture and other

manufacturing

10,4 0,8 -0,9 5,9


Table 2.4 shows quarter-to-quarter seasonally adjusted growth rates of agro-processing

industries during the third quarter of 2015. South African paper and paper products, wearing

apparel and fur performed above the world growth rates, developing and emerging

industrialised economies and industrialised economies, while furniture and other

manufacturing only performed below developing and emerging industrialised economies

and industrialised economies.

7

3. STATE OF THE DOMESTIC ECONOMY

Despite the real output of the primary sector contracting further at a somewhat faster pace

over the period, resulting in the real output of the agricultural sector declining sharply in all

three quarters of 2015 at the back drop of adverse drought conditions in many parts of the

country, the South African real growth turned positive in the third quarter of 2015, thereby

evading a recession following the short-lived contraction in the second quarter. Mining

production contracted for the second consecutive quarter, affected primarily by lower

production of platinum and iron ore in the third quarter. Platinum production declined due to

scheduled maintenance work at certain platinum furnaces as well as safety stoppages, while

iron ore production was reduced in reaction to a global oversupply.

Table 3.1: South African economic growth rate (percentage change at seasonally adjusted annualised

rates

Sector

2014 2015

Q3 Q4 Year Q1 Q2 Q3

Primary sector 5,2 13,3 0,0 2,9 -9,5 -10,4

Agriculture 9,5 7,5 5,6 -18,0 -19,7 -12,6

Mining 3,9 15,2 -1,6 10,2 -6,4 -9,8

Secondary sector -0,2 7,5 0,6 -1,0 -5,1 3,3

Manufacturing -1,0 9,5 0,0 -2,4 -6,3 6,2

Tertiary sector 2,4 1,8 2,1 1,7 1,0 1,9

Non-primary

sector

1,8 3,0 1,8 1,1 -0,4 2,2

Total 2,1 4,2 1,5 1,4 -1,3 0,7

Source: Reserve Bank (2015)

The manufacturing and the non-primary sector rebounded by 6,2% and 2,2%, respectively,

while the real value added of the primary sector contracted even further due to the

agricultural and the mining sector both decelerating by 12,6% and 9,8%, respectively during

the period. The decline in the agricultural sector output is due to the sector growth in the real

value added remaining under pressure throughout the first three quarters of 2015 as dry

weather conditions and low moisture levels in arable land adversely affected the maize,

sugar cane and sunflower crops in particular. The maize crop for the 2014/15 production

season amounted to 9,9 million tons compared to 14,3 million tons in the preceding season.

Mining production continued to be affected by declining international commodity prices

and rising production costs (see Table 3.1).

8

Source: Statistics SA (2015a)

In South Africa, the unemployment rate measures the number of people actively looking for

a job as a percentage of the labour force. The unemployment rate in South Africa increased

by 25,5% in the third quarter of 2015 following a 25,0% rate recorded in the preceding period.

The unemployment rate averaged 25,2% from 2000 until 2015, reaching an all-time high of

31,2% in the first quarter of 2003 and a record low of 21,5% in the fourth quarter of 2008.

During the period, the sectors that recorded large decreases in formal employment were in

finance, community and social services industries (24 000 and 10 000, respectively), while

large employment gains were in the construction (59 000), trade (47 000) and manufacturing

(31 000) industries.

Source: Statistics SA (2014b, 2015c)

23.0

23.5

24.0

24.5

25.0

25.5

26.0

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%

Figure 3.1: Quarterly unemployment rate

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Figure 3.2: Total CPI and PPI inflation

CPI PPI

9

During the third quarter of 2015, the producer inflation for final manufactured goods

moderated stagnated at 3,4% as compared to the previous quarter. However, the

consumer price inflation of food products increased marginally by 4,6% in the third quarter of

2015 following a 4,5% growth in the previous quarter. The consumer price of food products

increased slightly, mainly because of moderate increases in fish (7,8%), bread and cereal

(5,5%), (milk, eggs and cheese) (5,5%) and meat (3,7%). However, vegetables decelerated

by 2,0%.

Table 3.2: Exchange rates of the rand (percentage change)

Source: Reserve Bank (2015)

Table 3.2 shows the exchange rates of the rand during the third quarter of 2015. The real

effective exchange rate of the rand declined by 5,0% from December 2014 to September

2015, extending the gains in competitiveness of local producers in foreign markets as the real

external value of the rand has now been below its ten-year average level for more than

three years.

4. THE AGRO-PROCESSING INDUSTRY

The FAO (1997) defines agro-processing as a subset of manufacturing that processes raw

materials and intermediate products derived from the agricultural sector. Therefore, the

agro-processing industry basically transforms products originating from the agriculture,

forestry and fisheries sectors. According to the Standard Industrial Classification, the agro-

processing industry comprises the following 11 divisions: food products, beverages, tobacco,

textiles, wearing apparel, leather and leather products, footwear, paper and paper

products, wood and wood products, rubber and furniture. This section reviews the economic

performance of nine divisions2 during the third quarter of 2015, given the global and

domestic economic situation during the period.

1 The Reserve Bank calculates the nominal effective exchange rate of the rand based on trade in and consumption of

manufactured goods between South Africa and its most important trading partners. It is calculated against 15 currencies. The weights of the five major currencies are in brackets: Euro (0,34), US dollar (0,14), Chinese yuan (0,12), British pound (0,10), Japanese yen (0,10).

2 The Directorate: Agro-processing Support prepares a separate economic review for the food and beverage industry. However,

in this report when the overall agro-processing industry’s sales, export, import and employment is reported the eleven divisions including the food and beverages are incorporated.

31 Dec 2014

to

31 March 2015

31 March 2015

To

30 June 2015

30 June 2015

to

30 Sep 2015

30 Sep 2015

to

31 Dec 2015

Weighted

average1

-0,2 -1,8 -9,0 -1,5

Euro 7,3 -4,1 -11,8 2,3

US dollar -5,2 -0,3 -11,4 -3,6

Chinese Yuan -5,2 -0,3 -9,2 -3,0

British pound -0,2 -6,3 -7,9 -2,3

Japanese yen -4,8 1,4 -12,9 -0,9

10

4.1 TOBACCO

The quarter-to-quarter and year-on-year producer price index of tobacco increased by 0,6%

and 5,8%, respectively during the period under review (see Table 4.2).

Table 4.1: Producer price index for tobacco products (base 2012 = 100)

Indices % change between

2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

116,2 122,1 122,9 5,8 0,6

Source: Statistics SA (2015c

Source: Quantec EasyData (2015)

The year-on-year and quarter-to-quarter import of tobacco contracted by 1,0% and 17,1%

following growths of 77,0% and 25,9%, respectively, as recorded in the previous quarter.

However, quarter-to-quarter export of tobacco rebounded significantly by 9,5% following a

contraction of 7,6% in the second quarter of 2015. On the other hand, year-on-year export of

tobacco contracted by 0,4% from a 4,8% growth recorded in the preceding quarter. As a

result, the trade deficit widened from R445,8 million in the second quarter of 2015 to R534,8

million in the current period (see Figure 4.1).

0100200300400500600700800900

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Figure 4.1: Quarterly trade balance of tobacco

Export Import

11

Source: Statistics SA (2015f)

Figure 4.2 shows that during the third quarter of 2015, the year-on-year formal employment in

the beverage and tobacco industry increased marginally by 5,0%, following a growth of 4,2%

registered in the previous year. However, the quarter-to-quarter number of formal

employment decelerated by 0,2%, following a contraction of 4,4% registered during the

second quarter of 2015. As a result, 98 fewer jobs were shed in the third quarter of 2015

compared to 1 880 jobs shed in the preceding quarter.

4.2 TEXTILES

Table 4.2 presents the producer price index for textiles during the third quarter of 2015. The

year-on-year producer price of textiles for domestic output increased by 6,5%, while quarter-

to-quarter it contracted by 0,1%.

Table 4.2: Producer price index for textiles (base 2012=100)

Source: Statistics SA (2014a)

36 000

37 000

38 000

39 000

40 000

41 000

42 000

43 000

20

13:

Q3

20

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Q4

20

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Q1

20

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Q2

20

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Q3

20

14

: Q

4

20

15:

Q1

20

15:

Q2

201

5:Q

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Figure 4.8: Number of formal employment: beverage and tobacco

products


2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Textile 110,7 117,3 117,2 6,5 -0,1

12

Source: Statistics SA (2015d)

The quarter-to-quarter seasonally adjusted physical volume of production for textiles

contracted by 0,4% following a rebound of 0,7% in the previous quarter, while the year-on-

year seasonally adjusted physical volume of production for textiles marginally increased by

6,7% from a growth of 5,1% in the preceding quarter. However, the year-on-year and

quarter-to-quarter volume of production for other textiles decelerated by 3,1% and 6,2%,

following a contraction of 4,9% and 3,9%, respectively in the quarter under review (see Figure

4.2).

Table 4.3: Utilisation and reasons for underutilisation of production capacity by large enterprises: Textiles

(percentage)

Period Utilisation Reasons for under-utilisation

Total

under-

utilisation

Shortage of Insufficient

demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 69,1 30,9 0,5 0,4 0,0 25,5 4,6

2015: Q2 69,8 30,2 1,3 0,6 0,0 24,6 3,7

2015: Q3 70,8 29,2 1,2 10,7 0,0 24,2 3,6

Source: Statistics SA (2015e)

Table 4.3 shows that the utilisation of production capacity by large enterprises in the textiles

division marginally increased year-on-year and quarter-to-quarter. Insufficient demand was

the main reason for the under-utilisation of production capacity by large enterprises of

50

60

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Ind

ex (

2010 =

100)

Figure 4.2: Seasonally adjusted physical volume of production: textiles

Textiles Other textile products

13

textiles, followed by shortage of skilled labour and other reasons such as downtime due to

maintenance.


For the period under review, the year-on-year physically adjusted value of sales for textiles

substantially increased by 8,1% following a moderate growth of 4,9% in the second quarter of

2015. However, the quarter-to-quarter value of sales moderated by 2,3% following a rebound

of 2,8% registered in the second quarter. The year-on-year value of sales for other textile

products moderated by 0,3% from a 1,3% growth in the previous quarter, while quarter-to-

quarter physical volume remained unchanged (see Figure 4.3).


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Figure 4.3: Seasonally adjusted value of sales (current prices): textiles

Textiles Other textile products

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Figure 4.4: Quarterly trade balance of textiles

Export Import

14

Figure 4.4 shows the quarterly trade balance of textiles during the third quarter of 2015. The

quarter-to-quarter export of textiles contracted by 1,3% from a rebound of 3,6% in the

previous quarter, while the year-on-year export of textiles moderated by 3,6% in the third

quarter of 2015 from a growth of 4,8% in the previous quarter. The quarter-to-quarter import

of textiles rebounded by 21,4% from a contraction of 10,2% in the previous quarter. On the

other hand, the year-on-year textile import substantially increased by 16,3% from a 8,2%

growth in the second quarter of 2015. As a result, the trade surplus of the textile industry

increased by R3 048,8 million in the third quarter of 2015 from R2 172,4 million in the last

quarter.


The quarter-to-quarter and year-on-year number of formal employment, for other textiles

and preparation and spinning of textile fibres increased marginally 2,0% and 4,1%, following

growths of 0,2% and 1,1%, respectively recorded in the preceding quarter. While the year-on-

year and quarter-to-quarter number of employment for textiles and preparation and

spinning of textile fibres rebounded by 0,7% and 2,2% following a contraction of 0,6% and

0,8%, respectively as registered in the second quarter of 2015. As a result, 667 jobs were

created in third quarter of 2015; compared to 236 jobs shed in the preceding quarter.

Table 4.4: Net balance of the BER manufacturing survey: Textiles

2015: Q1 2015: Q2 2015: Q3 2015: Q4*

Domestic sales volumes -28 -22 -13 10

Export sales volumes -20 -33 -20 -12

Production volumes -30 -12 -32 1

Domestic order volumes received -33 -20 -18 10

Export order volumes received -21 -57 -20 -14

General business conditions -46 -22 -42 -13

0

5 000

10 000

15 000

20 000

25 000

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5:Q

3

Figure 4.4: Number of formal employment: textiles

Preparation and spinning of textile fibres; weaving of textiles

Other textiles

15

2015: Q1 2015: Q2 2015: Q3 2015: Q4*

Number of factory workers -4 -17 -27 0

Fixed investment -12 -6 -10 15

Business confidence 9 40 16

Expected volume of goods imported in 12

months’ time 13 58 61

Expected volume of goods exported in 12

months’ time -16 -57 11

Expected real investment in machinery and

equipment in 12 months’ time 11 -51 -8

Expected business conditions in 12 months’ time -25 -31 -58

*Expected Source: BER (2015)

Table 4.4 presents the manufacturing survey of the textile division conducted by BER during

the third quarter of 2015. The year-on-year outlook for the fourth quarter of 2015 shows that

some variables, except for domestic sales volume, production volumes and employment,

are expected to decrease.

4.3 WEARING APPAREL

Table 4.5 shows that during the third quarter of 2015, the year-on-year and quarter-to-quarter

producer price index for domestic wearing apparel output increased by 6,1% and 3,7%,

respectively.

Table 4.5: Producer price index for wearing apparel (base 2012 = 100)

Source: Statistics SA (2015c)


2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Domestic output

Wearing apparel 115,4 117,8 121,5 6,1 3,7

16


Figure 4.6 The quarter-to-quarter and year-on-year physical volume of production for

wearing apparel and knitted or crocheted fabrics rebounded by 3,8% and 4,5%,

respectively, in the current quarter, while the year-on-year volume of production for wearing

apparel contracted by 0,8% and increased for knitted or crocheted fabrics by 5,3% quarter-

to- quarter.

Table 4.6: Utilisation and reasons for underutilisation of production capacity by large enterprises:

Wearing apparel (percentage)


Total

under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q4 78,9 27,4 0,5 1,1 0,3 16,4 2,9

2015: Q3 79,1 28,4 0,6 1,1 0,3 15,9 2,8

2015: Q4 79,1 20,9 0,7 1,0 0,3 16,7 2,2


Table 4.6 shows that the utilisation of production capacity by large enterprises in the wearing

apparel division increased marginally year-on-year and quarter-to-quarter. Insufficient

demand remained the key reason behind low capacity utilisation, followed by other reasons

such as lower productivity and seasonal factors.

50

60

70

80

90

100

110

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

Ind

ex (

2010 =

100)

Figure 4.6: Seasonally adjusted physical volume of production:

wearing apparel

Wearing apparel Knitted or crocheted fabrics

17


Figure 4.7 indicates the year-on-year and quarter-to-quarter seasonally adjusted value of

sales for wearing apparel moderated by 4,4% and 4,0%, respectively in the third quarter of

2015, while the year-on-year seasonally adjusted value of knitted and crocheted articles

decelerated by 3,0%, following a contraction of 6,5% in the preceding quarter, while the

quarter-to-quarter adjusted value of knitted and crocheted articles increased substantially

by 9,3% from a 0,5% growth recorded in the second quarter of 2015.


Figure 4.8 shows the quarterly trade balance of wearing apparel. The quarter-to-quarter and

year-on-year export of wearing apparel increased modestly by 10,0% and 11,7% from a

growth of 7,4% and 11,0% it registered in the previous quarter. On the other hand, the year-

on-year import increased substantially by 23,1%, following a 9,9% growth in the second

quarter of 2015, while the quarter to quarter import rebounded by 38,2% from a 19,9%

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

201

0: Q

3

20

10

: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

R m

illio

n

Figure 4.7: Seasonally adjusted value of sales (current prices):

wearing apparel

Wearing apparel Knitted, crocheted articles

0

200

400

600

800

1 000

1 200

1 400

1 600

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

20

13

: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.8: Quarterly trade balance of wearing apparel

Export Import

18

contraction in the preceding quarter. As a result, the trade surplus of the wearing apparel

industry increased from R3 249,9 million in the previous quarter to R4 836,2 million during the

current quarter.


During the third quarter of 2015 the year-on-year and quarter-to-quarter formal employment

of knitted and crocheted fabric and articles industries rebounded by 3,5% and 5,6%,

following a 0,9% and 0,7%, respective growths recorded in the previous quarter. Conversely,

the year-on-year for wearing apparel moderated by 1,0%, while it contracted by 0,5%

quarter-to-quarter for knitted and crocheted articles. As a result, 201 jobs were shed in the

wearing apparel industry during the period.

Table 4.7: Net balance of the BER manufacturing survey: Clothing

2015: Q1 2015: Q2 2015: Q3 2015: Q4*

Domestic sales volumes 45 79 93 87

Export sales volumes 90 86 91 83

Production volumes 51 79 97 94

Domestic order volumes received 45 78 93 85

Export order volumes received 90 86 91 83

General business conditions -46 -70 0 -1

Number of factory workers 45 78 98 91

Fixed investment 77 71 54 86


Expected volume of goods imported in 12

months’ time 7 -53 49


months’ time 89 83 94

05 000

10 00015 00020 00025 00030 00035 00040 00045 000

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

20

15:

Q2

20

15:

Q3

Figure 4.9: Number of formal employment: wearing apparel

Wearing apparel, except fur;dressing and dying of fur, articles of fur

Knitted and crocheted fabrics and articles

19

2015: Q1 2015: Q2 2015: Q3 2015: Q4*

Expected real investment in machinery and

equipment in 12 months’ time 97 94 35

Expected business conditions in 12 months’ time -38 1 -40


Table 4.7 presents the manufacturing survey of the clothing division conducted by BER during

the third quarter of 2015; the year-on-year outlook for the fourth quarter of 2015 shows that

most variables are expected to increase, except for general business conditions.

4.4 LEATHER AND LEATHER PRODUCTS


The year-on-year seasonally adjusted physical volume of production for leather and leather

products increased moderately by 5,5% during the third quarter of 2015 following a 3,8%

growth it registered in the previous quarter. However, the quarter-to-quarter volume of

production for leather and leather products contracted by 1,2% from a rebound of 4,1% in

the second quarter of 2015 (See Figure 4.10).


Leather and leather products (percentage)


Total

under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 62,7 37,3 4,9 0,2 0,5 30,2 1,6

2015: Q2 74,5 25,5 4,5 0,5 1,1 17,7 1,7

2015: Q3 74,5 25,5 4,8 0,9 1,1 17,7 1,7

50

60

70

80

90

100

110

120

130

140

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

20

14

: Q

2

201

4: Q

3

201

4: Q

4

20

15

: Q

1

201

5: Q

2

201

5: Q

3

Ind

ex (

2010 =

100)


leather and leather products

20


The utilisation of production capacity by large enterprises in the leather and leather products

division increased substantially year-on-year but remained unchanged quarter-to-quarter.

Among the reasons for under-utilisation, insufficient demand remained the main reason,

followed by a shortage of raw materials.


The quarter-to-quarter seasonally adjusted value of sales for leather and leather products

increased marginally by 6,0% from a growth of 5,5% in the previous quarter. On the other

hand, the year-on-year value of sales substantially increased by 16,8%, following a growth of

1,5% in the previous quarter (see Figure 4.11).


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

201

0: Q

3

201

0: Q

4

20

11

: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

20

15

:Q2

201

5:Q

3

R m

illio

n


leather and leather products

0

200

400

600

800

1 000

1 200

1 400

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

20

13

: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.12: Quarterly trade balance of leather and leather products

Export Import

21

Figure 4.12 presents the quarterly trade balance of leather and leather products. The

quarter-to-quarter and year-on-year export of leather contracted by 5,8% and 0,2% following

8,0% and 17,6% growths respectively in the preceding quarter. However, the year-on-year

import increased modestly by 16,1%, while it rebounded by 35,4% following 8,7% contraction

quarter-to-quarter. As a result, the trade surplus increased from the R91,1 million recorded in

the previous quarter to R408,7 million registered during the third quarter of 2015.


The year-on-year formal employment in the leather and leather products moderated by 5,8%

from a growth of 9,8% recorded in the previous quarter. However, the quarter-to-quarter

formal employment in the leather and leather products industry contracted by 0,3% from a

growth of 4,9% in the previous quarter. As a result, 15 jobs were shed in the third quarter of

2015, as compared to 230 jobs created in the second quarter of 2015 (see Figure 4.13).

4.5 FOOTWEAR

The year-on-year and quarter-to-quarter producer price index of footwear for domestic

output increased by 8,6 % and 2,7%, respectively during the third quarter of 2015 (see Table

4.9).

Table 4.9: Producer price index for footwear (base 2012 = 100)


2014: Q3 2015: Q2 2015: Q4 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Domestic output

108,6 114,5 117,2 8,6 2,7


3 000

3 500

4 000

4 500

5 000

5 500

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5:Q

3

Figure 4.13: Number of formal employment: leather and leather

products

22


The year-on-year and quarter-to-quarter seasonally adjusted physical volume of production

for footwear products decelerated by 13,3% and 0,9%, during third quarter of 2015 following

contractions of 2,0% and 10,7%, respectively, registered in the previous quarter (see Figure

4.14).


Footwear (percentage)


Total

under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 83,5 16,5 2,4 0,0 0,0 11,5 0,0

2015: Q2 85,2 14,2 1,8 0,5 0,0 11,9 0,0

2015: Q3 83,3 10,7 2,7 0,5 0,0 13,1 0,0


The utilisation of production capacity by large enterprises in the footwear division marginally

decreased year-on-year and quarter-to-quarter during the third quarter of 2015. The quarter-

to-quarter decline in capacity utilisation is consistent with the decrease of production in the

division during the period under review. Insufficient demand is the main reason behind low

capacity utilisation, followed by a shortage of raw materials (see Table 4.10).

50

60

70

80

90

100

110

120

20

10

: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

Ind

ex (

2010 =

100)


footwear

23


The year-on-year seasonally adjusted value of sales for the footwear industry contracted by

8,6%, following a growth of 8,6% in the previous quarter. During the third quarter of 2015, the

quarter-to-quarter value of sales rebounded by 0,9% from a contraction of 1,8% in the

previous quarter (see Figure 4.15).


Figure 4.16 shows that a quarter-to-quarter of import and export of footwear rebounded by

47,8% and 24,7% following contractions of 25,9% and 2,7%, respectively in the preceding

quarter. However, the year-on-year import of footwear industry moderated by 10,4%, while it

increased substantially by 16,4% for the footwear export. Owing to the substantial increase in

import compared to export of footwear, the trade surplus of the division increased from R1

029,1 million in the second quarter of 2015 to R1 586,2 million in the third quarter of 2015.

0

200

400

600

800

1 000

1 200

1 400

1 600

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

R m

illio

n


footwear

0

500

1 000

1 500

2 000

2 500

20

10:

Q3

20

10

: Q

4

20

11:

Q1

20

11:

Q2

20

11:

Q3

20

11:

Q4

20

12:

Q1

20

12:

Q2

20

12:

Q3

20

12:

Q4

20

13:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15

: Q

1

20

15:

Q2

20

15:

Q3

R m

illio

n

Figure 4.16: Quarterly trade balance of footwear

Export Import

24


Figure 4.17 shows that the quarter-to-quarter and the year-on-year formal employment in the

footwear industry contracted by 1,8% and 5,8%, following a growth of 5,0% and 5,1%,

respectively in the previous quarter. As a result, 169 jobs were shed in the third quarter of

2015, as compared to 445 jobs created in the second quarter of 2015.

4.6 WOOD AND WOOD PRODUCTS

The producer price for domestic output of wood and paper products grew year-on-year and

quarter-to-quarter by 7,2% and 0,8% respectively during the third quarter of 2015 (see Table

4.11).

Table 4.11: Producer price index for wood and paper products (base 2012 = 100)


2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2014: Q3

Domestic output

113,4 120,7 121,6 7,2 0,8


6 000

6 500

7 000

7 500

8 000

8 500

9 000

9 500

10 000

20

13

: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5:Q

3

Figure 4.17: Number of formal employment: footwear

25


The quarter-to-quarter physical volume of production for sawmilling and planning of wood

and wood products contracted by 0,1% and 1,0% in the third quarter of 2015, following

growths of 2,4% and 2,2%, respectively in the previous quarter. However, the year-on-year

physical volume of sawmilling and planning of wood increased modestly by 15,0% following

a 13,8% growth recoreded in the preceding quarter and moderated by 3,5% for wood and

wood products (see Figure 4.18).

Table 4.12: Utilisation and reasons for underutilisation of production capacity by large

enterprises: Wood and wood products (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 81,8 18,2 2,1 1,7 0,0 9,1 5,4

2015: Q2 82,4 17,6 2,3 1,6 0,1 9,6 4,0

2015: Q3 83,5 16,5 2,4 1,8 0,1 8,2 4,1


Based on Table 4.12, year-on-year and quarter-to-quarter utilisation of production capacity

by large enterprises of wood and wood products increased in the current period. Insufficient

demand and other reasons such as lower productivity and seasonal factors were the main

reasons for under-utilisation of production capacity in the division.

50

60

70

80

90

100

110

120

130

140

20

10:

Q3

20

10:

Q4

20

11:

Q1

20

11:

Q2

20

11:

Q3

20

11:

Q4

20

12:

Q1

20

12:

Q2

20

12:

Q3

20

12:

Q4

20

13

: Q

1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

20

15:

Q2

20

15:

Q3

Ind

ex (

2010 =

100)


wood and wood products

Sawmilling and planing of wood Products of wood

26


The year-on-year sawmilling and planning of wood and products of wood increased by

21,0% and 7,4%, following growths of 18,2% and 3,3%, respectively in the current quarter.

However, the quarter-to-quarter value of sales for sawmilling and planning of wood

contracted by 0,2%, following a growth of 5,8% in the previous quarter, however, it

moderated by 0,6% for products of wood following a 3,1% growth recorded in the preceding

quarter (see Figure 4.19).


The quarter-to-quarter import of wood and wood products rebounded by 12,8%, following a

14,0% contraction in the preceding quarter and it increased marginally by 7,0% year-on-year.

On the other hand, the quarter-to-quarter export contracted by 3,2%, however, it

moderated year-on-year by 11,3%, following a growth of 18,0% in the preceding quarter. As

a result, the trade deficit narrowed from R482, 8 million in the previous quarter to R288,4

million in the period under review (see Figure 4.20).

0

1 000

2 000

3 000

4 000

5 000

6 000

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

20

15

:Q2

201

5:Q

3

R m

illio

n

Figure 4.19: Seasonally adjusted value of sales (current prices): wood

and wood products


0200400600800

1 0001 2001 4001 6001 800

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.20: Quarterly trade balance of wood and wood products

Export Import

27


The quarter-to-quarter formal employment of sawmilling and planing of wood moderated by

4,6% following a 5,5% growth in the second quarter of 2015. However, it rebounded by 2,1%

year-on-year. On the other hand, the formal employment of the wood and wood products

division decelerated by 1,5% year-on-year and rebounded by 0,9% quarter-to-quarter. As a

result, the total number of formal employment created in the wood and wood products and

sawmilling and planing of wood is 2 021 in the period under review (see Figure 4.21).

Table 4.13: Net balance of the BER manufacturing survey: Wood and wood products

2015: Q1 2015: Q2 2015: Q3 2015:Q4

Domestic sales volumes 13 46 42 45

Export sales volumes -7 48 -26 -26

Production volumes 14 46 81 45

Domestic order volumes received 14 66 42 45

Export order volumes received -6 48 -90 -90

General business conditions 12 -13 -29 -26

Number of factory workers 4 -9 -26 -26

Fixed investment 68 10 -29 42


Expected volume of goods imported in

12 months’ time

11 29 -1

Expected volume of goods exported in

12 months’ time

-10 -74 -90

Expected real investment in machinery

and equipment in 12 months’ time

75 70 42

10 000

30 000

50 000

70 000

90 000

110 000

130 000

150 000

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

20

15

:Q3

Figure 4.21: Number of formal employment: wood and wood

products


28

2015: Q1 2015: Q2 2015: Q3 2015:Q4

Expected business conditions in 12

months’ time

-31 -10 -71


Table 4.13 presents the manufacturing survey of the wood and wood products division by

BER during the third quarter of 2015. The year-on-year outlook for the fourth quarter of 2016 is

both equally positive and negative for the given variables.

4.7 PAPER AND PRINTED PRODUCTS

The producer price for domestic output of paper and printed products decreased year-on-

year and quarter-to-quarter by 8,2% and 0,9%, respectively during the third quarter of 2015

(see Table 4.14).

Table 4.14: Producer price index for paper and paper products (base 2012 = 100)



The quarter-to-quarter physical volume of production for paper and paper products

increased substantially by 7,2% from a 0,7% growth during the third quarter of 2015. However,

the year-on-year physical volume of production for paper and paper products rebounded

by 8,4% following a contraction of 4,4% registered in the previous quarter (see Figure 4.22).

50

60

70

80

90

100

110

120

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4:Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

Ind

ex (

2010 =

100)

Figure 4.22: Seasonally adjusted physical volume of production: paper

and paper products


2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Domestic output

Paper and paper

products

113,4 120,7 121,6 -8,2

-0,9

29

Table 4.15: Utilisation and reasons for underutilisation of production capacity by large enterprises: Paper

and paper products (percentage)

Period Utilisation Reasons for underutilisation

Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 85,6 14,4 1,1 1,5 0,2 5,6 6,1

2015: Q2 83,6 16,4 0,9 1,7 0,3 6,8 6,7

2015: Q3 85,1 14,9 0,7 1,3 0,4 5,4 8,4


Table 4.12 shows utilisation of production capacity by large enterprises in the paper division.

The year-on-year utilisation decreased marginally, while it increased modestly quarter-on-

quarter. The increase in the utilisation of production capacity is reflected by the increase in

volume of production. Other reasons such as seasonal factors and insufficient demand

remained the main reasons for underutilisation of production capacity.


The quarter-to-quarter and year-on-year value of sales in paper and paper products

increased substantially by 6,5% and 13,8% in the third quarter of 2015 from growths of 1,3%

and 5,7% it recorded in the previous quarter (see Figure 4.23).

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

20

12

: Q

4

201

3: Q

1

20

13

: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

R m

illio

n


paper and paper products

30


The quartet-to-quarter import and export of paper and paper products increased

substantially by 17,2% and 17,1%, following growths of 2,0% and 4,2%, respectively in the

preceding quarter. However, it moderated by 7,4% for import year-on-year and increased by

21,0% for export following a recorded 4,8% recorded in the previous quarter. As a result, the

trade deficit widened from R725,0 million in the previous quarter to R845,6 million during the

third quarter of 2015 (see Figure 4.24).


Formal employment in the paper and paper products division further decelerated by 4,4%

year-on-year during the third quarter of 2015 following a contraction of 6,7% in the preceding

quarter. Compared to the previous quarter, formal employment in the paper and paper

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

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1

201

3: Q

2

201

3: Q

3

201

3: Q

4

20

14

: Q

1

20

14

: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.24: Quarterly trade balance of paper and paper products

Export Import

25 000

27 000

29 000

31 000

33 000

35 000

37 000

39 000

41 000

43 000

201

3: Q

3

20

13

: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

20

15

: Q

2

201

5:Q

3

Figure 4.25: Number of formal employment: paper and paper

products

31

products division rebounded by 0,4%, following a contraction of 3,8% in the second quarter

of 2015 (see Figure 4.25). As a result, 167 jobs were created in third quarter of 2015 as

compared to 1 471 jobs shed in the previous period.

Table 4.16: Net balance of the BER manufacturing survey: Paper and paper products

2015: Q1 2015: Q2 2015: Q3 2015:Q4

Domestic sales volumes -40 -18 23 86

Export sales volumes -71 -45 8 13

Production volumes 56 -28 -6 86

Domestic order volumes received -39 -18 20 86

Export order volumes received -5 -44 8 8

General business conditions -41 -60 -26 32

Number of factory workers -5 -14 4 1

Fixed investment 13 10 6 7


Expected volume of goods imported in

12 months’ time 2 36 4


months’ time -57 -2 3



-16 -19 35


months’ time

-37 -4 18


Table 4.16 shows the manufacturing survey of the paper and paper products division by BER during the

third quarter of 2015. The year-on-year outlook for the fourth quarter of 2015 is positive for all variables.

4.8 RUBBER PRODUCTS

The producer price for domestic output of rubber and plastic products grew by 0,1% year-on-

year, while it contracted by 2,5% quarter-to-quarter during the third quarter of 2015 (see

Table 4.17).

Table 4.17: Producer price index for rubber products (base 2012 = 100)



2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Domestic output

Rubber products 118,8 116,2 118,7 0,1 -2,5

32


The quarter-to-quarter physical volume of production for rubber products increased

marginally by 4,8% in third quarter of 2015 following a growth of 3,8% in the previous quarter.

However, the year-on-year physical volume increased modestly by 6,4% from a 3,6% growth

recorded in the previous quarter (see Figure 4.26).


Rubber products (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 79,3 20,7 0,2 0,5 0,0 19,7 0,3

2015: Q2 80,2 19,8 0,1 0,9 0,0 14,5 4,3

2015: Q3 79,0 21,0 0,4 0,1 0,0 15,2 4,6


As seen in Table 4.18, the year-on-year and quarter-to-quarter utilisation of production

capacity by large enterprises in rubber products decreased marginally in the current period.

Insufficient demand and other reason such as seasonal factors remain the reasons for under-

utilisation.

50

60

70

80

90

100

110

120

130

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

20

11

: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

Ind

ex (

2010 =

100)


rubber products

33


The quarter-to-quarter value of sales in the rubber products division moderated by 5,1% in

third quarter of 2015, following a growth of 5,3% in the previous quarter (see Figure 4.27).

However, the year-on-year value of sales increased substantially by 5,6% following a 0,6%

growth recorded in the previous year.

Source: Statistics SA (2015)

The quarter-to-quarter import of rubber products rebound by 25,2% following a contraction

of 9,5% in the previous quarter, while it substantially increased year-on-year for import of

wood and wood products by 9,0%, following a growth of 0,5% in the second quarter of 2015.

On the other hand, export decelerated by 2,4% year-on-year and moderated by 6,1%

quarter-to-quarter (see Figure 4.28). As a result, the trade surplus widened from R2 669,7

million in the previous quarter to R3 753,0 million in the third quarter of 2015.

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

201

0: Q

3

201

0: Q

4

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3

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4: Q

3

201

4: Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

R m

illio

n

Figure 4.27: Seasonally adjusted value of sales (current prices): rubber

products

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.28: Quarterly trade balance of rubber products

Export Import

34


Formal employment in the rubber products division increased marginally by 2,2% year-on-

year following a 1,0% growth in the preceding quarter, however it remained unchanged

quarter-to-quarter (see Figure 4.29). As a result, five jobs were shed in the industry in the

current period.

4.9 FURNITURE

The year-on-year and quarter-to-quarter producer price for domestic output of furniture and

other manufacturing contracted by 9,8% and 1,3%, respectively during the third quarter of

2015 (see Table 4.19).

Table 4.19: Producer price index for furniture and other manufacturing (Base 2012=100)


2014: Q3 2015: Q2 2015: Q3 2014: Q3 and

2015: Q3

2015: Q2 and

2015: Q3

Domestic output

109,5 118,0 119,3 -9,8 -1,3


10 000

10 500

11 000

11 500

12 000

12 500

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

20

15

: Q

1

201

5: Q

2

201

5:Q

3

Figure 4.29: Number of formal employment: rubber products

35


The quarter-to-quarter physical volume of production for furniture products rebounded by

1,0% in the third quarter of 2015 following a contraction of 5,2% it registered in the preceding

quarter. However, the year-on-year physical volume of production decelerated by 5,8%

following a contraction of 9,8% in the previous quarter.


Furniture (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q3 86,0 14,0 0,9 1,5 0,0 11,6 0,1

2015: Q2 76,6 23,4 0,8 0,8 0,0 20,1 0,1

2015: Q3 77,3 22,7 0,8 0,8 0,0 20,1 0,3


Utilisation of production capacity by large enterprises of furniture increased modestly year-

on-year. However, it increased marginally as compared to the previous quarter (see Table

4.20). Insufficient demand and skilled labour remained the main reasons for under-utilisation

of production capacity.

50

60

70

80

90

100

110

120

130

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

20

12

: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

20

15

: Q

3

Ind

ex (

2010 =

100)


furniture

36


The year-on-year and quarter-to-quarter value sales of production of furniture rebounded by

1,3% and 2,4% in 2015 quarter three, following a contraction of 2,8% and 1,9%, respectively

recorded in the previous quarter of 2015 (see Figure 4.31).


The quarter-to-quarter and year-on-year export and import of furniture industry moderated

by 14,5% and 16,6% following a 16,7% and 18,0% respective growths recorded in the previous

quarter. On the other hand, the furniture industry export rebounded by 9,3% from a 10,9%

contraction in the second quarter of 2015, while it substantially grew for furniture import by

25,3%, quarter-to-quarter (see Figure 4.32). As a result, the trade surplus increased from R635,7

million in the previous quarter to R914,0 million in the period under review.

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

201

0: Q

3

201

0: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

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2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

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3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5:Q

2

201

5:Q

3

R m

illio

n


furniture

0

500

1 000

1 500

2 000

2 500

201

0: Q

3

20

10

: Q

4

201

1: Q

1

201

1: Q

2

201

1: Q

3

201

1: Q

4

201

2: Q

1

201

2: Q

2

201

2: Q

3

201

2: Q

4

201

3: Q

1

201

3: Q

2

201

3: Q

3

201

3: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

201

5: Q

2

201

5: Q

3

R m

illio

n

Figure 4.32: Quarterly trade balance of furniture

Export Import

37


The quarter-to-quarter and year-on-year formal employment in the furniture industry

decelerated by 0,5% and 1,6% in the current quarter, following a contraction of 0,3% and

2,3%, respectively in the previous period. As a result, 135 jobs were shed in the furniture

industry as compared to 74 jobs shed in the preceding quarter (see Figure 4.33).

Table 4.21: Net balance of BER manufacturing survey: Furniture

2015: Q1 2015: Q2 2015: Q3 2015:Q4

Domestic sales volumes 50 -71 -9 12

Export sales volumes 62 -71 -34 -34

Production volumes 76 -49 -6 17

Domestic order volumes received 50 -49 -9 12

Export order volumes received 62 -71 -34 -34

General business conditions -77 -85 -89 -89

Number of factory workers -71 10 -9 -51

Fixed investment 36 10 -36 -47


Expected volume of goods imported

in 12 months’ time 62 0 40

Expected volume of goods exported

in 12 months’ time -11 0 45



-20 -97 -10


months’ time

-33 -1 -89


24 000

25 000

26 000

27 000

28 000

29 000

30 000

31 000

201

3: Q

3

20

13

: Q

4

201

4: Q

1

201

4: Q

2

201

4: Q

3

201

4: Q

4

201

5: Q

1

20

15

: Q

2

20

15:Q

3

Figure 4.33: Number of formal employment: furniture

38

Table 4.21 shows the manufacturing survey of the furniture division by BER during the third

quarter of 2015. The year-on-year outlook for the fourth quarter of 2015 is negative for most

variables except domestic sales volumes and production volumes.

5. CONCLUSION

The moderate growth of the domestic economy in the third quarter of 2015 provided a

favourable environment for an increase in production of the most agro-processing divisions.

The divisions that increased production in the quarter under review are: paper and paper

products, rubber, wearing apparel, beverages and furniture divisions. However, the volume

of production decreased for beverages and footwear. As a result of an increase in the

production volumes of most agro-processing divisions, the nominal value of sales of agro-

processing increased marginally by 3,3% as compared to 2,4% growth in the preceding

quarter.

Owing to an increase in export compared to import, the agro-processing industry shed 453

formal jobs as compared to the preceding quarter loss of 6 501 jobs. The divisions that shed

jobs are food, furniture, beverages, wearing apparel and leather and leather products while

wood and wood products and textiles divisions created 2 012 and 667 jobs, respectively.

REFERENCES

BER (2015), Manufacturing Survey. Bureau for Economic Research, University of Stellenbosch.

FAO (1997), The State of Food and Agriculture. Rome: Food and Agriculture Organization.

IMF (2015), World Economic Outlook, Update. International Monetary Fund.

Quantec EasyData (2015), RSA International Trade. Accessed in September 2015.

Reserve Bank (2015), Quarterly Bulletin, September 2015. South African Reserve Bank.

Statistics SA (2015a), Quarterly Labour Force Survey, various issues. Statistics South Africa.

Statistics SA (2015b), Consumer Price Index, various issues. Statistics South Africa.

Statistics SA (2015c), Producer Price Index, various issues. Statistics South Africa.

Statistics SA (2015d), Manufacturing: Production and Sales, various issues. Statistics South

Africa.

Statistics SA (2015e), Manufacturing: Utilisation of Production Capacity by Large Enterprises.

Statistics South Africa.

Statistics SA (2015f), Quarterly Employment Statistics, various issues. Statistics South Africa.

UNIDO (2015), World Manufacturing Production, Statistics for Quarter 3, 2015, Statistics Unit,

United Nations Industrial Development Organisation.

Documents

PREFACE - nda.agric.za · Paper and paper products 4,9 0,0 8,3 1,7 Furniture and other manufacturing 9,0 1,2 -5,8 5,4 Source: UNIDO (2015) and Quantec (2015) Table 2.3 shows the year-on-year