PREFACE...and furniture. The main economic indicators reviewed are the changes in producer price, production volume, value of sales, capacity utilisation by large enterprises, formal

1

PREFACE

The agro-processing industry is among the sectors identified by National Development Plan

(NDP, 2011), Industrial Policy Action Plan (IPAP, 2015) and Agricultural Policy Action Plan

(APAP, 2015) for its potential to spur growth and create employment because of its strong

backward linkage with the primary agricultural, forestry and fisheries industry. DAFF

established the 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 functions of the Directorate is to provide timely and

updated economic Agro-processing information 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 publishes regular quarterly economic reviews review of

the agro-processing industry.

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

January to March 2015 evaluates the performance of the nine divisions within agro-

processing during the first 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 ................................................................................................................................ 2

1. INTRODUCTION ....................................................................................................................................... 3

2. OVERVIEW OF THE GLOBAL ECONOMY ............................................................................................. 4

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

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

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

4.2 TEXTILES ................................................................................................................................................. 12

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

4.4 LEATHER AND LEATHER PRODUCTS ............................................................................................. 20

4.5 FOOTWEAR ...................................................................................................................................... 23

4.6 WOOD AND WOOD PRODUCTS ................................................................................................. 26

4.7 PAPER AND PAPER PRODUCTS ..................................................... Error! Bookmark not defined.

4.8 RUBBER PRODUCTS ......................................................................................................................... 35

4.9 FURNITURE ........................................................................................................................................ 38

REFERENCES ............................................................................................................................................... 42

EXECUTIVE SUMMARY

Compiled by Deborah Makola with inputs from:

Vhutshilo Khorombi and Betty Seshibe

Sefala Building Office 233

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

Real growth in the South African economy moderated by 1,5% in the first quarter of 2015,

following a growth of 4,1% recorded in the fourth quarter of 2014. Growth in real gross

domestic production slowed to an annualised rate of 1,3% cent in the first quarter of 2015.

This disappointing growth performance reflected a contraction in the real output of the

secondary sector and slower growth in the primary and tertiary sectors. During the first

quarter, the rubber products division showed a considerable increase of 7,7 % in production

volume, followed by paper and paper products (5,8%), leather and leather products (3,8%),

textiles (3,5%), wearing apparel (2,0%), food (0,9%) and wood and wood products (0,3%)

divisions. However, footwear, furniture and beverages divisions registered a negative growth

of 3,6%, 3,3% and 0,9%, respectively in the quarter under review.

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

the nominal value of sales of agro-processing moderated by 1,0% compared to the previous

quarter of 1,5%. Therefore, the total value of sales grew modestly from R420 748 million in the

preceding quarter to R424 849 million during the first quarter of 2015. The growth in value of

sales was registered for wood and wood products (4,8%), leather and leather products

(3,3%), wearing apparel (3,0%), rubber (0,5%), textiles (0,3%). However, footwear , paper

and paper products, furniture, food and beverages divisions registered a negative growth of

9,4%, 3,8%, 3,1%,1,5% and 0,6%, respectively during the first quarter of 2015.

During the first quarter of 2015, the following divisions registered a positive trade balance:

tobacco (R211,3 million), beverages (R1 771 million), paper and paper products (R 532,8

million), and wood and wood products (R211, 3 million), while the following divisions

registered a negative trade balance (furniture (R 5 499, 5 million), wearing apparel (R4 447, 2

million), rubber (R 3 394, 8 million), textiles (R2 936, ,5 million), food (R2 384, 3 million), footwear

(R 1 479,6 million) and leather and leather products (R 296, 5 million). As a result, the total

agro-processing trade deficit widened from R12 763,5 million in the preceding quarter to R

17 310,4 million during the first quarter of 2015.

The agro-processing industry created 4 101 formal jobs during the first quarter of 2015 due to

the marginal production growth of most of its divisions. Divisions that created a significant

number of jobs were as follows: beverages and tobacco (1 930), furniture (1 065), food

products (945) textiles (846), wearing apparel (670), rubber (406), leather and leather

products (175) divisions. However, jobs were shed in the wood and wood products (1 029),

paper and paper products (554) and footwear (353) divisions. Hence, formal employment in

agro-processing industry increased by 420 748 in the previous quarter to 424 842 during the

first quarter of 2015.

1. INTRODUCTION

Global economic growth increased during the first quarter of 2015 prompted by the growth

of advanced economies. The South African economy moderated as the tertiary sector

maintained a positive growth. The mining sectors rebounded substantially as compared to

the preceding quarter. However, the primary and the non-primary sector moderated during

2015: Q1. This quarterly review assesses the economic performance of the agro-processing

industry, given growth increase of both global and domestic economic activities during the

first quarter of 2015.

4

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

economy and the state of the domestic economy, respectively, during the first 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

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

each division. In addition, an outlook for the first 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

Complex forces that affected global activity in 2014 are still shaping the outlook. These

include medium- and long-term trends, such as population aging and declining potential

growth; global shocks, such as lower oil prices; and many country- or region-specific factors,

such as crisis legacies and exchange rate swings triggered by actual and expected changes

in monetary policies. Overall, global growth is projected to reach 3,5% and 3,8% in 2015 and

2016, respectively, in line with the projections in the January 2015 World Economic Outlook

(WEO) Update. Growth is projected to be stronger in 2015 relative to 2014 in advanced

economies, but weaker in emerging markets, reflecting more subdued prospects for some

large emerging market economies and oil exporters as presented in Table 2.1. The world

output data projects that the global economy will grow by 3,5% in 2016, but increase by 3,8%

in 2016.

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

Source: IMF (2015)

Global growth is projected to reach 3,5% and 3,8% in 2015 and 2016, respectively, in line with

the projections in the January 2015 World Economic Outlook (WEO) Update. Growth is

projected to be stronger in 2015 relative to 2014 in advanced economies, but weaker in

emerging markets, reflecting more subdued prospects for some large emerging market

economies and oil exporters. Medium-term prospects have become less optimistic for

Projections

2013 2014 2015 2016

World Output 3,4 3,4 3,5 3,8

Advanced Economies 1,4 1,8 2,4 2,4

US 2,2 2,4 3,1 3,1

Euro area –0,5 0,9 –1,5 1,6

Japan 1,6 –0,1 1,0 1,2

Emerging market and developing

economies

5,0 4,6 4,3 4,7

China 7,8 7,4 6,8 6,3

India 6,9 7,2 7,5 7,5

Russia 1,3 0,6 –3,8 –1,1

Brazil 2,7 0,1 –1,0 1,0

Sub-Saharan Africa 5,2 5,0 4,5 5,1

South Africa 2,2 1,5 2,0 2,1

5

advanced economies, and especially for emerging markets, in which activity has been

slowing since 2010.

Table 2.2: Seasonally adjusted estimated growth rates of world manufacturing output, 2015: Q1

Share in the world

manufacturing value

added (2010)

Growth rate

compared to the

previous quarter

(Quarter-to-

Quarter)

Growth rate compared

to the same period of

previous year

(Year-on-Year)

World 100,0 4,4 2,8

Industrialised economies 67,7 0,0 1,3

North America 22,4 -0,3 3,7

Europe 24,7 0,4 1,2

East Asia 17,2 -0,3 -2,0

Developing and emerging

industrial economies(by

development group)

32,3 11,2 5,3

China 15,3 17,8 7,2

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

Other developing countries 2,7 -4,8 1,4


industrial economies(by region)

32,3 11,2 5,3

Africa 1,5 0,9 2,1

Asia and Pacific 21,7 14,0 6,6

Latin America 5,8 -1,4 -2,1

Others 3,3 2,5 3,7

Source: UNIDO (2015) and Quantec (2015)

The world manufacturing output growth rate during the first quarter 2015 is presented in Table

2.2. Compared to the same period of the previous year (year-on-year), world manufacturing

output moderated by 2,8% supported by 1,3% growth of industrialised economies, 5,3% of

developing and emerging industrial economies, (by development group). The main

contributor during the period of growth of the world manufacturing output was the 67,7%

growth of industrialized economies, which is largely directed by the growth rates of North

America, Europe and East Asia by 22,4%, 24,7% and 17,2%, respectively. The quarter-to-

quarter growth of world manufacturing output was marginal mainly as a result of weak

performance of North America and East Asia. However, for Europe growth of manufacturing

output was positive.

Table 2.3: Seasonally adjusted estimated growth rates of output by the manufacturing sector, 2015: Q1

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


industrialised economies

Industrialised

economies

South Africa World

Food and beverages 4,8 0,4 7,4 2,4

Textiles 4,2 -0,9 4,1 2,9

Wearing apparel, fur 5,5 -5,2 -1,5 2,7

Leather, leather products and 2,8 -2,5 -4,4 (leather) 1,4

6

footwear 7,8 (footwear)

Wood products 3,3 1,1 3,7 1,9

Paper and paper products 2,6

-1,3

-4,6 0,1

Furniture and other

manufacturing

7,0

2,1

-0,3 4,6


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

processing industries in the world for the period 2015:Q1. South Africa’s food and beverages,

textile, wood products, footwear, paper and paper and furniture and other manufacturing

products division grew above world’s average growth while, wearing apparel and leather

and leather products and footwear fell below. The South African textile, wearing apparel, fur

and paper and paper products, food and beverages, leather and leather products,

footwear, furniture and other manufacturing and wood products divisions performed below

developing and emerging industrialised economies, while food and beverages, textiles,

wood products, and footwear performed above Industrialised economies.

Table 2.4: Seasonally adjusted estimated growth rates of output by manufacturing sector, 2015: Q1 (in

% compared to 2014: Q4)

Developing and

emerging industrialised

economies

Industrialised

economies

South Africa World

Food and beverages 9,9 0,5 2,9 4,7

Textiles 15,1 1,8 -0,4 11,7

Wearing apparel, fur 16,4

3,1

-2,1 12 9

Leather, leather

products and

footwear

10,4

1,2

-1,4 (leather)

3,2 (footwear)

7,8

Wood products 15,6

0,0

5,5 5,2

Paper and paper

products

9,0

0,5

-5,9 3,4

Furniture and other

manufacturing

-2,3

3,4

1,9 0,4


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

industries during the first quarter of 2015. Most of the South African agro-processing divisions

performed below developing and emerging industrialised economies except furniture and

other manufacturing. However, South Africa performed better on wood products and

furniture and other manufacturing compared to the Industrialised economies and the world

during 2015: Q1

7

3. STATE OF THE DOMESTIC ECONOMY

During 2015: Q1, the growth of South African economy moderated by 1,3%, following a

growth of 1,5% it registered 2014: Q4. The growth is triggered by positive performance of the

mining, primary sector; tertiary sector and non-primary sector (see Table 3.1). The primary

sector grew by 3,3% in the first quarter of 2015, following by a remarkable growth 13,3% in the

preceding quarter. Growth in the agricultural sector contracted sharply by 16,6% in the first

quarter of 2015 following a growth of 7,5% in the preceding quarter. The mining sector,

tertiary and non-primary sectors moderated by 10,2%, 1,5% and 0,8% in the first quarter of

2015, following a growth of 15,2%, 2,1% and 1,8% registered in the previous quarter. However,

the manufacturing sector, contracted by 2,4% in 2015:Q1 following a growth of 9,5%

recorded in the previous quarter. The disappointing performance of the manufacturing

sector reflected sustained weak domestic demand, local infrastructure constraints and lower

commodity prices

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

rates

Sector

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Year

(2014)

Q1 2015

Primary sector -17,2 -1,0 5,2 13,3 0,0 3,3

Agriculture 4,8 5,6 9,5 7,5 5,6 -16,6

Mining -22,8 -3,0 3,9 15,2 -1,6 10,2

Secondary sector -3,8 -2,5 -0,4 7,2 0,4 -1,4

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

Tertiary sector 1,7 1,9 2,4 1,8 2,1 1,5

Non-primary sector 0,4 0,9 1,8 3,0 1,8 0,8

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

Source: Reserve Bank (2015)

The real production of the primary sector moderated at an annualised rate of 3,3% in the first

quarter of 2015 following a significant growth of 13,3% in the preceding quarter. Agriculture

production contracted sharply in the first quarter of 2015, partly neutralizing a further increase

in the real value added by the mining sector.

8

Source: Statistics SA (2015a)

The unemployment rate for 2015:Q1 increased by 25,2% as compared to 24,3% recorded in

the previous quarter. The number of employed people increased by 140 000 in Q1: 2015

compared to Q4: 2014. Large quarterly gains were observed in the Finance (156 000),

Agriculture (150 000) and Private households industries (69 000). Job losses were recorded in

the Trade, Transport and Community and social services industries (201 000, 53 000 and

51 000 respectively). Compared to the same period last year, employment increased by 405

000. Large annual increases were observed in the Agriculture (183 000), Finance (149 000)

and Construction (122 000) industries. The largest decrease in employment was observed in

the Trade industry (140 000) (see Figure 3.1).

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

0

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9

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%

Figure 3.2: Total CPI and PPI inflation

CPI PPI

9

During the first quarter of 2015, the average producer and consumer price inflation

moderated by 3,4% and 4,5%, respectively. Compared to the average producer and

consumer price inflation, the producer price increased more for wood and wood products

(20,2%) and furniture and other manufacturing products (10,3%) divisions. The consumer price

of food products moderated mainly because of the moderation in prices of food products,

fish and fish products, fruit and vegetables and meat and meat products by 6,9%, 3,8%, 5,2%

and 12,7%, respectively. However, oils and fats contracted by 2,5% in the quarter under

review.

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 first quarter of 2015. The trade

weighted average exchange rate of the rand grew by 3,7% during the first quarter of 2015

following a rebound of 0,3% recorded in the previous quarter. Despite having depreciated

against the US dollar, the rand appreciated against the euro, partly reflecting the differences

in economic performance between the US and euro area.

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 agriculture, forestry

and fisheries. 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 first 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 March 2014

to

30 June 2014

30 June 2014

to

30 Sep 2014

30 Sep 2014

to

31 Dec 2014

31 Dec 2014

to

27 Feb 2014

Weighted

average1

-0,4 -2,0 0,3 3,7

Euro 0,7 1,7 1,3 9,0

US dollar -0,2 -5,6 -2,9 0,6

Chinese Yuan -0,4 -6,5 -1,8 1,6

British pound -2,5 -1,2 1,5 1,6

Japanese yen -1,7 1,9 6,2 0,3

10

4.1 TOBACCO

During the first quarter of 2015, the quarter-to-quarter and year-on-year producer price index

of tobacco products increased by 3,9% and 10,3%, respectively (see table 4.2).

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

Indices % change between

2014: Q1 2014: Q4 2015: Q1 2014: Q4 and

2015: Q1

2014: Q4 and

2015: Q4

109,4 116,2 120,7 3,9 10,3

Source: Statistics SA (2015c)

Source: Quantec EasyData (2015)

Figure 4.1 shows the quarterly trade balance for tobacco during the first quarter of 2015. The

year-on-year export of tobacco increased by 11,3% following a 5,1% growth recorded in the

previous quarter. However, the year-on-year import of tobacco moderated by 4,6% from a

growth of 27,6% recorded during 2014: Q4. On the other hand, the quarter-to-quarter export

of tobacco contracted by 14,2% as compared to the 14,7% increase registered in the fourth

quarter of 2014, while the import of tobacco rebounded by 0,5% following a contraction of

5,6% registered in the previous quarter. As a result, the trade surplus of tobacco decreased

from R644,0 million in the previous quarter to R53,2 million during 2015: Q1.

0

100

200

300

400

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600

700

800

900

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R m

illio

n

Figure 4.1: Quarterly trade balance of tobacco

Export Import

11

Source: Statistics SA (2015f)

Figure 4.2 shows number of formal employment in the beverages and tobacco divisions in

2015:Q1. The year-on-year formal employment in the beverage and tobacco industry

decelerated by 0,6% following a contraction of 3,3% registered in the previous quarter.

However, the quarter-to-quarter number of formal employment increased marginally by 4,9%

following a growth of 4,1% registered during the fourth quarter of 2014. As a result, 1 930 jobs

were created in 2015:Q1.

4.2 TEXTILES

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

year-on-year and quarter-to-quarter producer price of textiles for domestic output increased

by 4,1% and 0,7%, respectively.

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

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20

15:

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Figure 4.8: Number of formal employment: beverage and

tobacco products


2014: Q1 2014: Q4 2015: Q1 2014:Q1and

2015: Q1

2014: Q4 and

2015: Q1

Textile 107,3 110,7 111,4 4,1 0,7

12

Source: Statistics SA (2015d)

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

contracted by 0,5% following a growth of 6,6% in the previous quarter, while the year-on-

year physical adjusted volume of production of textiles moderated by 4,2% following a

growth of 6,8% in the previous quarter. However, the quarter-to-quarter seasonally adjusted

physical volume of production for other textile moderated by 0,7% following a growth of 1,0%

in 2014:Q4, while other textile year-on-year physical volume of production marginally

increased by 3,4% from a moderate growth of 2,3% recorded in the previous quarter.

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

(percentage)

Period Utilisation Reasons for underutilisation

Total under-

utilisation

Shortage of Insufficient

demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 69,1 30,9 1,3 0,8 0,1 24,1 4,6

2014: Q4 73,7 26,3 1,6 0,4 0,0 20,8 3,5

2015: Q1 72,0 28,0 1,4 1,3 0,0 22,4 3,9

Source: Statistics SA (2015e)

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

division increased moderately year-on-year and decreased slightly quarter-to-quarter during

the period under review. Insufficient demand was the main reason for the underutilisation of

production capacity by large enterprises of textiles, followed by other reason and a shortage

of raw materials.

50

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Ind

ex (

2010 =

100)

Figure 4.2: Seasonally adjusted physical volume of production:

textiles

Textiles Other textile products

13


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

moderated by 6,8% following a growth of 15,1% in 2015:Q1, while the quarter-to-quarter

contracted by 2,5% following a growth of 5,8% in the previous quarter. However, the quarter-

to-quarter value of sales for other textile products increased marginally by 0,4% following a

growth of 0,2% in the previous quarter and the year-on-year moderated by 5,5% following a

growth of 6,5% recorded in the preceding quarter.


0

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illio

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

textiles

Textiles Other textile products

0

500

1 000

1 500

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3 000

3 500

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5 000

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illio

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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 first quarter of 2015. The

quarter-to-quarter and year-on-year export of textiles contracted by 16,8% and 4,2%

following a growth of 8,8% and 5,9%, respectively in the previous quarter, The quarter-to-

quarter import trade balance of textile rebounded by 13,0% following a contraction of 5,9%

recorded in the previous quarter. However, the year-on-year of textile import substantially

increased by 14,8% following a growth of 4,7% in the previous quarter. As a result, the trade

deficit of the textile industry increased from R2 139,9 million in 2014: Q4 to R2 936,6 million in

2015: Q1.


The quarter-to-quarter formal employment in other textiles division moderately increased by

3,6% following a growth of 0,4% recorded in the previous quarter, while the year-on-year

formal employment in other textiles division rebounded by 2,4% following a contraction of

2,1% recorded in the previous quarter. The quarter-to-quarter formal employment in the

preparation and spinning of textile fibres, weaving of textiles rebounded by 1,1% following a

contraction of 2,0% in 2014:Q4. However, the year-on-year decelerated by 0,9% following a

contraction of 4,4% in the previous quarter. As a result, 846 jobs were created 2015:Q1.

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

2014:Q3 2014: Q4 2015: Q1 2015: Q2*

Domestic sales volumes -30 7 -28 -22

Export sales volumes -40 44 -20 -33

Production volumes -23 12 -30 -12

Domestic order volumes received -30 11 -33 -20

Export order volumes received -40 44 -21 -57

General business conditions -34 -47 -46 -22

Number of factory workers -64 -21 -4 -17

Fixed investment -38 49 -12 -6

Business confidence 14 21 9

0

5 000

10 000

15 000

20 000

25 000

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.4: Number of formal employment: textiles

Preparation and spinning of textile fibres; weaving of textiles Other textiles

15

2014:Q3 2014: Q4 2015: Q1 2015: Q2*

Expected volume of goods imported in 12 months’

time 15 -2 13

Expected volume of goods exported in 12 months’

time -28 58 -16

Expected real investment in machinery and

equipment in 12 months’ time -55 46 11

Expected business conditions in 12 months’ time -52 -4 -25

*Expected Source: BER (2015)

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

the first quarter of 2015. The year-on-year outlook for the next quarter shows that all variables

are expected to decrease.

4.3 WEARING APPAREL

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

producer price index for domestic wearing apparel output increased by 5,0% and 1,3%,

respectively.

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



50

60

70

80

90

100

110

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


wearing apparel

Wearing apparel Knitted or crocheted fabrics


2014: Q1 2014: Q4 2015: Q1 2014: Q1 and

2015: Q1

2014: Q4 and

2015: Q1

Domestic output

Wearing apparel 111,6 115,7 117,2 5,0 1,3

16

Figure 4.6 shows that the year-on-year and quarter-to-quarter physical volume of production

for knitted and crocheted fabrics decelerated by 14,2% and 4,8%, respectively following a

contraction of 14,3% and 1,9%, respectively registered in the previous quarter. However, the

year-on-year and quarter-to-quarter volume of production for wearing apparel contracted

by 1,6% and 2,2%, in the quarter under review following a growth of 8,9% and 1,7%,

respectively in 2014:Q4.

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: Q1 80,0 20,0 0,4 0,9 0,3 15,4 2,2

2014: Q4 85,5 19,5 0,6 0,9 0,3 15,6 2,2

2015: Q1 79,5 20,5 0,6 0,9 0,3 15,6 2,2


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

apparel division decrease year-on-year and modestly increased quarter-to-quarter of the

period under review. Insufficient demand remained the key reason behind low capacity

utilisation, followed by other reason such as low productivity and shortage of skilled labour.


0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n


wearing apparel

Wearing apparel Knitted, crocheted articles

17

As shown by figure 4.7, the year-on-year seasonally adjusted value of sales for wearing

apparel moderated by 3,0% following a growth of 9,5% registered in the previous quarter .

However, the year-on-year seasonally adjusted value of sales for knitted and crocheted

articles decelerated by 11,6% during 2015:Q1 following a contraction of 17,2% registered in

the fourth quarter of 2014. However, the quarter-to-quarter value of sale of wearing apparel

contracted by 4,7% following a growth of 4,5%, while the value of sale of knitted and

crocheted articles rebounded by 2,4% following a contraction of 7,6% in the preceding

quarter. The year-on-year total wearing apparel moderated by 1,3% in 2015:Q1 following a

marginal increase of 10,9% in the previous quarter.


Figure 4.8 shows the trade balance of wearing apparel division. The quarter-to-quarter export

value of wearing apparel contracted by 22,0% following a growth 21,4% in the previous

quarter. However the year-on-year export value increased modestly by 22,5% following a

growth of 17,5% in the previous quarter. The quarter-to-quarter import of wearing apparel

rebounded by 12,4% following a contraction of 1,0% registered in the previous quarter,

however the year-on-year import of wearing apparel increased significantly by 11,6%

following a growth of 6,0% in 2014: Q4. As a result, the trade deficit of the wearing apparel

industry increased from R3 508, 9 million in the preceding quarter to R4 447, 3 million during

the quarter under review.

0

1 000

2 000

3 000

4 000

5 000

6 000

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:

Q1

R m

illio

n

Figure 4.8: Quarterly trade balance of wearing apparel

Export Import

18


During 2015:Q1 the year-on-year formal employment of knitted and crocheted fabric and

articles industry decelerated by 2,0% following a contraction of 5,0% of the previous quarter.

However, the quarter-to-quarter rebounded by 2,9% in 2015:Q1 following a contraction of 0,

1% in the previous quarter. The year-on-year and quarter-to-quarter formal employment of

wearing apparel industry rebounded by 1,1%and 1,3% in 2015: Q1 following a contraction of

2,0% and 1,4%, respectively registered in the preceding quarter. As a result, the total formal

employment in the wearing apparel division created 670 jobs in 2015:Q1.

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

2014: Q3 2014: Q4 2015: Q1 2015: Q2*

Domestic sales volumes 2 -38 45 79

Export sales volumes 76 96 90 86

Production volumes 44 -38 51 79

Domestic order volumes received 2 -38 45 78

Export order volumes received 87 96 90 86


Number of factory workers 44 50 45 78

Fixed investment 8 6 77 71


Expected volume of goods imported in 12 months’

time 3 0 7

Expected volume of goods exported in 12 months’

time 44 97 89

Expected real investment in machinery and

equipment in 12 months’ time 46 98 97

Expected business condition in 12 months’ time 46 -46 -38


0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

20

13

: Q

2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14

: Q

3

20

14:

Q4

20

15:

Q1

Figure 4.4: Number of formal employment: wearing apparel

Knitted and crocheted fabrics and articles

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

19

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

the first quarter of 2015. The year-on-year outlook shows that all other variables are positive

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 decelerated by 4,5% during 2015:Q1 following a contraction of

6,6% registered in the previous quarter. However, the quarter-to-quarter volume of

production for leather and leather products contracted by 1,5% in 2015:Q1 following

a growth of 3,8% registered in the fourth quarter of 2014 (see Figure 4.10).


Leather and leather products (percentage)


Total

under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 70,2 29,7 5,3 0,2 0,5 22,1 1,3

2014: Q4 74,6 25,4 4,0 0,2 0,8 19,3 1,1

2015: Q1 70,3 29,7 4,5 0,2 0,6 22,5 1,9


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

division increased marginally year-on-year but declined modestly quarter-to-quarter. The

quarter-to-quarter decline in the utilisation of leather and leather products is reflected by the

decrease in the physical volume of production. Among the reasons for underutilisation,

50

60

70

80

90

100

110

120

130

140

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


leather and leather products

20

insufficient demand remained the main reason, followed by shortage raw materials then

other reasons such as low productivity.


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

moderated by 0,3% following a growth 4,3% in the previous quarter. However, the year-on-

year value of sales of leather and leather products decelerated by 0,7% following a

contraction of 1,9% in the previous quarter.


0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

20

10:

Q1

20

10:

Q2

20

10:

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20

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14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n


leather and leather products

0

200

400

600

800

1 000

1 200

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:

Q1

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 export of leather decelerated by 15,5% following a contraction of 5,1% in

the previous quarter while, the year-on-year export of leather and leather products

moderated by 0,1% following a growth 16,2% in the previous quarter. However, the import of

leather and leather products of contracted by 12,3% following a growth of 7,0% in the

previous quarter. The year-on-year import trade balance of leather and leather products

increased marginally by 14,3% following a growth of 12,4% registered in the previous quarter.

As a result, the trade deficit increased from the R308, 4 million recorded in the previous

quarter to R296, 4 million in the first quarter of 2015.


The year-on-year formal employment in the leather and leather products industry rebounded

by 4,5% from a contraction of 3,1% in the previous quarter. However, the quarter-to-quarter

formal employment in the leather and leather products division rebounded by 3,8% following

a contraction of 2,6% in the previous quarter. As a result, 175 jobs were created in 2015:Q1

4.5 FOOTWEAR

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

output increased by 5,4% and 1,5%, respectively during the first quarter of 2015 (see Table

4.9).

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


2014: Q1 2014: Q4 2015: Q1 2014: Q4 and

2015: Q1

2014: Q1 and

2015: Q1

Domestic output

104,9 108,8 110,3 5,4 1,5

3 000

3 200

3 400

3 600

3 800

4 000

4 200

4 400

4 600

4 800

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.13: Number of formal employment: leather and leather

products

22

Source: Statistics SA (2015d) The year-on-year seasonally adjusted physical volume of production for footwear products

increase significantly by 7,8% during 2015: Q1 following a growth of 2,3% registered in the

previous quarter. However, the quarter-to-quarter volume of production for footwear

products rebounded by 3,2% in 2015:Q1 following a contraction of 3,8% in the previous

quarter (see Figure 4.14).


Footwear (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 87,0 13,0 2,4 1,9 0,0 8,8 0,0

2014: Q4 86,1 13,9 0,2 1,9 0,0 9,4 0.6

2015: Q1 86,8 13,2 1,9 1,0 0,0 9,8 0,6


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

decreased year-on-year and slightly increased quarter-to-quarter during 2015:Q1 (see Table

4.10). The quarter-to-quarter increase in capacity utilisation is consistent with the increase of

production in the division during the period under review. Insufficient demand is the main

reason behind low capacity utilisation followed by shortage of raw materials.

50

60

70

80

90

100

110

120

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


footwear

23


The year-on-year seasonally adjusted value of sales of the footwear moderated 9,0%

following a growth of 14,8% in the previous quarter. During the first quarter of 2015, the

quarter-to-quarter value of sales decelerated by 3,0% following a contraction of 4,4% in the

previous quarter (see Figure 4.15).


0

200

400

600

800

1 000

1 200

1 400

20

10:

Q1

20

10:

Q2

20

10:

Q3

20

10:

Q4

20

11:

Q1

20

11:

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11:

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12:

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12:

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20

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Q1

20

13:

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13:

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20

13:

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20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n

Figure 4.15: Seasonally adjusted value of sales (current prices): footwear

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

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:

Q1

R m

illio

n

Figure 4.16: Quarterly trade balance of footwear

Export Import

24

Figure 4.16 shows that quarter-to-quarter export of footwear contracted by 26,9% following a

growth of 31,2% in the previous quarter, while the year-on-year export of footwear

moderated by 21,9% following a growth of 22,7% in the previous quarter. However, the year-

on-year import of footwear increased modestly by 18,2% during the first quarter of 2015

following a growth of 14,2% in the previous quarter, while the quarter-to-quarter import of

footwear rebounded by 24,2% following a contraction of 18,5% recorded in the preceding

quarter. As a result, the trade deficit increased from R1 029,2 million in 2014:Q4 to R1 479,6

million in the first quarter of 2015.


The quarter-to-quarter formal employment of the footwear industry decelerated by 3,8%

following a contraction of 5,1% in the previous quarter. However, the year-on-year formal

employment of the footwear industry rebounded by 3,3% following a contraction of 3,3% in

the previous quarter. As a result, 353 jobs were shed in 2015:Q1 (see Figure 4.17).

4.6 WOOD AND WOOD PRODUCTS

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

year and quarter-to-quarter by 3,5% and 2,0%, respectively during the first quarter of 2015

(see Table 4.11).

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


2014: Q1 2014: Q4 2015: Q1 2014: Q1and

2015: Q1

2014: Q4 and

2015: Q1

Domestic output

106,4 107,9 109,9 3,5

2,0


6 000

6 500

7 000

7 500

8 000

8 500

9 000

9 500

10 000

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.17: Number of formal employment: footwear

25


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

products increased modestly by 7,1% in 2015:Q1 following a growth of 4,9% in previous

quarter. However, the year-on- year physical volume of production increased significantly by

12,6% following a growth 2,6% in the previous year. The volume of production for wood

products rebounded by 3,5% in 2015:Q1 following a contraction of 1,7% in the previous

quarter, while the year-on-year physical volume of production moderated by 3,7% from a

growth of 5,8% in the previous quarter.

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: Q1 81,5 18,5 1,7 1,3 0,0 10,4 5,0

2014: Q4 83,9 16,1 2,1 1,9 0,1 8,6 3,4

2015: Q1 82,8 17,2 0.2 1,8 0,1 9,5 3,9


Based on Table 4.12, the year-on-year, utilisation of production capacity by large enterprises

of wood and wood products division marginally increased, while the, the quarter-to-quarter

utilisation marginally decreased. Insufficient demand and other reasons such as downtime

because of maintenance, lower productivity and seasonal factors were the main reasons for

underutilisation of production capacity in the division.

50

60

70

80

90

100

110

120

130

140

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


wood and wood products

Sawmilling and planing of wood Products of wood

26


The value of sales in the sawmilling and planning of wood increased moderately by 7,5% in

2015:Q1 following a growth 5,3% in the previous quarter. However, the year-on-year value of

sales increased substantially by 11,7% following a growth of 2,4% in the previous year. The

quarter-to quarter value of sales in the products of wood rebounded by 3,2% following a

contraction of 0,7% in the previous quarter, while the year-on-year value of sales moderated

by 6,0 % following a growth of 7,7% in the previous quarter.


0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

20

10:

Q1

20

10:

Q2

20

10:

Q3

20

10:

Q4

20

11:

Q1

20

11:

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11:

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13:

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20

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20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n


wood and wood products


0

200

400

600

800

1 000

1 200

1 400

1 600

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:

Q1

R m

illio

n

Figure 4.20: Quarterly trade balance of wood and wood

products

Export Import

27

The quarter-to-quarter and year-on-year export of wood and wood products moderated by

2,1% and 14,7% in 2015: Q1, following a 6,3% and 24,0%, respectively registered in the

previous year. However, the quarter-to-quarter import of wood and wood products

rebounded by 16,0 % in the quarter under review following a contraction of 5,0% in 2014: Q4,

while the year-on-year import increased marginally by 10,9% following a growth of 9,6%

registered in the preceding quarter. As a result, the trade balance decreased from R358,4

million in the previous quarter to R211,3 million during 2015:Q1 (see Figure 4.24).


The year-on-year and quarter-to-quarter employment of sawmilling and planing of wood

decelerated by 4,9% and 5,9% in 2015: Q1, following a contraction of 3,1% and 0,9%,

respectively in the previous quarter. However, the quarter-to-quarter products of wood

contracted by 0,8% from an unchanged growth in 2014:Q1, while the year-on-year formal

employment of wood products grew by 0,4% following an unchanged growth in the previous

quarter. As a result, 219 jobs were shed in 2015:Q1.

10 000

12 000

14 000

16 000

18 000

20 000

22 000

24 000

26 000

28 000

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.21: Number of formal employment: wood and wood

products


28

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

2014: Q3 2014: Q4 2015: Q1 2015: Q2*

Domestic sales volumes -10 -31 13 46

Export sales volumes -42 -69 -7 48

Production volumes -51 -51 14 46

Domestic order volumes received -47 -24 14 35

Export order volumes received -100 -69 -6 66

General business conditions -47 -68 12 -13

Number of factory workers -9 23 4 -9



Expected volume of goods imported in

12 months’ time -67 44 11

Expected volume of goods exported in

12 months’ time -100 -59 -10

Expected real investment in machinery

and equipment in 12 months’ time -9 69 75

Expected business condition in 12

months’ time 11 -64 -30


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

BER during 2015:Q1. The year-on-year outlook for 2015:Q2 is positive for most variables except

for general business conditions and employment.

4.7 PAPER AND PRINTED PRODUCTS The producer price for domestic output of paper and printed products increased year-on-

year and quarter-to-quarter by 8,8% and 3,4%, respectively during the first quarter of 2015

(see Table 4.14).

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



2014: Q1 2014: Q4 2015: Q1 2014: Q1 and

2015: Q1

2014: Q4 and

2015: Q1

Domestic output

Paper and paper

products

111,0 116,4 119,8 8,8

3,4

29


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

product contracted by 5,9% and 4,6%, during the first quarter of 2015 following a growth of

5,5% and 8,0%, respectively as recorded in the previous quarter.

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

and paper products (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 85,5 14,5 1,1 1,3 0,2 5,9 6,0

2014: Q4 88,0 12,0 1,1 1,3 0,1 4,6 4,9

2015: Q1 84,4 15,6 0,0 1,6 0,3 6,7 6,5


Table 4.12, shows that the utilisation of production capacity by large enterprises in the paper

and paper products division decreased both year-on-year and quarter-to-quarter. The year-

on-year decrease in the utilisation of production capacity is reflected by the decrease in

volume of production. Insufficient demand and other reasons (such as downtime because of

maintenance, lower productivity and seasonal factors) remained the main reasons for

underutilisation of production capacity.

50

60

70

80

90

100

110

20

10:

Q1

20

10:

Q2

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:

Q1

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:Q

4

20

15:

Q1

Ind

ex (

2010 =

100)


paper and paper products

30


The quarter-to-quarter value of sales in the paper and paper products contracted by 1,4% in

2015:Q1 following a growth of 5,4% in the previous quarter. However, the year-on-year value

of sales moderated by 6,1 % following a growth of 13,2% in 2014: Q4.


The quarter-to-quarter and year-on-year export of paper and paper products contracted

by 3,6% and 4,1%, following a growth of 2,8% and 13,8%, respectively in preceding quarter.

However, the quarter-to-quarter import of paper and paper products decelerated by 7,4 %

following a contraction of 3,0% in 2014: Q4, while the year-on-year import moderated by

3,7% following a growth of 10,0% registered in the preceding quarter. As a result, the trade

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20

10:

Q1

20

10:

Q2

20

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20

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20

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20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

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20

15:

Q1

R m

illio

n


paper and paper products

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

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:

Q1

R m

illio

n

Figure 4.24: Quarterly trade balance of paper and paper products

Export Import

31

surplus increased from R468,2 million in the previous quarter to R612,7 million during 2015:Q1

(see Figure 4.24).


Formal employment in the paper and paper products division contracted by 1,4% quarter-

on-quarter during the first quarter of 2015 following a growth of 0,3% in the preceding

quarter. However, the year-on-year formal employment in the paper and paper products

division decelerated marginally by 6,0% in 2015:Q1 following a contraction of 5,9% in 2014:Q4

(see Figure 4.25). As a result, 554 jobs were shed in 2015:Q1.

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

2014: Q3 2014: Q4 2015: Q1 2015: Q2*

Domestic sales volumes -43 -19 -40

-18

Export sales volumes -18 9 -71 -45

Production volumes -36 -44 56 -28

Domestic order volumes received -43 -25 -35 -18

Export order volumes received -19 22 -5 -44


Number of factory workers 4 -2 -5 -14



Expected volume of goods imported in 12

months’ time 2 8 2

Expected volume of goods exported in 12

months’ time -11 20 -57

Expected real investment in machinery

and equipment in 12 months’ time 46 -11 -16

Expected business conditions in 12 months’

time -9 -1 -37


25 000

27 000

29 000

31 000

33 000

35 000

37 000

39 000

41 000

43 000

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.25: Number of formal employment: paper and paper

products

32

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

during the first quarter of 2015. The year-on-year outlook for the second quarter of 2015 is

negative for most variables except for fixed investment.

4.8 RUBBER AND PLASTIC PRODUCTS The quarter-on-quarter producer price for domestic output of rubber and plastic products

increased by 0,3%. However, the year-on-year contracted by 0,4% during the first quarter of

2015 (see Table 4.17).

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



The quarter-to-quarter physical volume of production for rubber products contracted by

9,2% following a growth of 7,3% in the previous quarter. However, the year-on-year physical

volume of production decelerated by 1,9% following a contraction of 0,9% in the previous

quarter.

50

60

70

80

90

100

110

120

130

20

10:

Q1

20

10:

Q2

20

10:

Q3

20

10:

Q4

20

11:

Q1

20

11:

Q2

20

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20

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Q4

20

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20

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20

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20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


rubber products


2014: Q1 2014: Q4 2015: Q1 2014: Q1 and

2015: Q1

2014: Q4 and

2015: Q1

Domestic output

Rubber products 117,8 117,1 117,4 -0,4

0,3

33


Rubber products (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 85,0 15,0 0,9 1,7 0,0 12,2 0,2

2014: Q4 85,6 14,4 0,3 0,9 0,0 13,3 0,0

2015: Q1 78,2 21,8 0,4 0,9 0,0 20,5 0,0


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

capacity by large enterprises in rubber products decreased. The quarter-to-quarter

slowdown in the utilisation of production capacity is consistent with the decrease in volume

of production. Insufficient demand and skilled labour continued to be the main reasons for

underutilisation of production capacity.


The year-on-year and quarter-to-quarter value of sales in the rubber products division

contracted by 9,3% and 10,2% respectively, in 2015: Q1 following a growth of 3,5% and 6,5%,

respectively in the previous quarter. (see figure 4:27).

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

20

10:

Q1

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10:

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20

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20

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20

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20

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20

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20

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20

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Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n


rubber products

34

Source: Statistics SA (2015)

The quarter-to-quarter and year-on-year of export of rubber products contracted by 17,5%

and 0,3% in 2015: Q1 following a growth of 0,1% and 4,3% , respectively in the previous

quarter. However, the quarter-to-quarter value of import rebounded by 2,3% in 2015:Q1

following a contraction of 5,9% in the previous quarter, while the year-on-year import

increased by 13,2 % following a growth of 10,3% in the preceding quarter (see Figure 4.28).

Owing to the relative increase of import to export, the trade deficit, increased from R2 870,8

million in the previous quarter to R3 394,8 million in the first quarter of 2015. (See figure 4.28).


0

1 000

2 000

3 000

4 000

5 000

6 000

20

12:

Q1

20

12:

Q2

20

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20

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14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n

Figure 4.28: Quarterly trade balance of rubber products

Export Import

10 000

10 500

11 000

11 500

12 000

12 500

20

13:

Q2

20

13:

Q3

20

13:

Q4

20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.29: Number of formal employment: rubber products

35

Formal employment in rubber products division rebounded by 3,7% quarter-to-quarter in

2015:Q1 following an unchanged growth of 0,0% in 2014:Q4. However, the year-on-year

formal employment rebounded by 2,8% following a contraction of 3,4% in the previous

quarter (see Figure 4:29). As a result, 406 jobs were created in 2015:Q1.

4.9 FURNITURE

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

other manufacturing increased by 11,0% and 2,9%, respectively during the first quarter of

2015 (see Table 4.19).

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


2014: Q1 2014: Q4 2015: Q1 2014: Q1 and

2015: Q1

2014: Q4 and

2015: Q4

Domestic output

106,5 114,6 117,5 11,0 2,9


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

1,9% in 2015: Q1 following a contraction of 3,6% in the previous quarter. However, the year-

on-year physical volume of production decelerated by 0,3% following a contraction of 3,3%

in the previous year.

50

60

70

80

90

100

110

120

130

20

10:

Q1

20

10:

Q2

20

10:

Q3

20

10:

Q4

20

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Q1

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14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Ind

ex (

2010 =

100)


furniture

36


Furniture (percentage)


Total under-

utilisation


demand

Other

Raw

materials

Labour

Skilled Semi and

unskilled

2014: Q1 79,7 20,3 1,2 1,5 0,0 17,3 0,3

2014: Q4 90,5 9,5 0,9 1,5 0,0 7,1 0,1

2015: Q1 76,8 23,2 0,8 1,5 0,0 20,9 0,0


Utilisation of production capacity by large enterprises of furniture decreased marginally year-

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

4.20). The quarter-to-quarter slowdown in the utilisation of production capacity is not

consistent with the volume of production. Insufficient demand and skilled labour remained

the main reasons for underutilisation of production capacity.


The value of sales in the furniture division modestly increased by 3,3% in 2015: Q1 following a

growth of 1,0% in the previous quarter. Similarly, the year-on-year value of sales increased

modestly by 10,6% following a growth of 6,0% in the previous year.

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

20

10:

Q1

20

10:

Q2

20

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20

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20

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Q1

R m

illio

n


furniture

37


The quarter-to-quarter growth of export of furniture contracted by 24,1% following a 7,8%

growth in the previous quarter, while the year-on-year export of furniture decelerated by 19,4

% following a contraction of 10,4 % in the previous quarter. However, the quarter-to-quarter

value of import decelerated by 4,0 % following a contraction of 14,5% in the preceding

quarter, while the year-on-year import contracted by 8,8% following a growth of 2,1% in

2015:Q1 (see Figure 4.32). As a result, the trade deficit increased from R5 475,7 million in the

previous quarter to R5 499,5 million in the period under review.


0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

20

12:

Q1

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14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

R m

illio

n

Figure 4.32: Quarterly trade balance of furniture

Export Import

24 000

25 000

26 000

27 000

28 000

29 000

30 000

31 000

20

13:

Q2

20

13:

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20

13:

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20

14:

Q1

20

14:

Q2

20

14:

Q3

20

14:

Q4

20

15:

Q1

Figure 4.33: Number of formal employment: furniture

38

Formal employment in the furniture division rebounded by 4,0% in 2015:Q1 following a

contraction of 4,6% in the previous quarter. However, the year-on-year formal employment

of furniture decelerated by 1,1% following a contraction of 11,3% in the preceding quarter.

As a result, 1 065 jobs were created in 2015: Q1.

Table 4.21: Net balance of BER manufacturing survey: Furniture

2014: Q3 2014: Q4 2015: Q1 2015: Q2*

Domestic sales volumes 10 34 50 -71

Export sales volumes -21 -59 62 -71

Production volumes 40 32 76 -49

Domestic order volumes received -9 36 50 -49

Export order volumes received 22 -59 62 -71


Number of factory workers -39 -20 -71 10

Fixed investment -33 46 36 10


Expected volume of goods imported

in 12 months’ time

-12 -15 62

Expected volume of goods exported

in 12 months’ time

88 38 -11

Expected real investment in

machinery and equipment in 12

months’ time

96 -26 -20

Expected business condition in 12

months’ time

-41 -73 -33


Table 4.21 shows the manufacturing survey of the furniture division by BER during 2015: Q1.

The year-on-year outlook is negative for most variables; except employment and fixed

investment.

Following a moderate domestic economic growth, the volume of production for the rubber,

paper and paper products, leather and leather, textiles, wearing apparel, food and wood

and wood products division increased during 2015:Q1. However, footwear, furniture and

beverages divisions registered a negative growth. As a result of the moderate growth of the

most of the agro-processing products, the nominal value of sales of agro-processing grew

modestly from R420 748 million in the preceding quarter to R424 849 million during the first

quarter of 2015. Despite a decrease in agro-processing export compared to import, formal

employment in agro-processing industry increased from 420 748 in the previous quarter to 424

842 during the first quarter of 2015. Most of the jobs were created in the beverages and

tobacco, furniture, food products, textiles, wearing apparel, rubber and leather and leather

products divisions.

39

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 March 2015.

Reserve Bank (2015), Quarterly Bulletin, June 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 1, 2015, Statistics Unit,

United Nations Industrial Development Organisation.

40

Documents

PREFACE...and furniture. The main economic indicators reviewed are the changes in producer price, production volume, value of sales, capacity utilisation by large enterprises, formal