Flash Notes
By Thanda Sithole
Mining production (not seasonally adjusted) declined sharply by 9.6% y/y in February, following a downwardly revised 1.5% contraction in January (previously -2.7%). The February outcome was notably weaker than expectations, surprising to the downside by 5.8 percentage points (ppts) relative to the Reuters consensus forecast of a 3.8% decline. Excluding gold, mining output fell by an even steeper 10.0% y/y.
Seasonally adjusted mining production, which feeds directly into quarterly GDP calculations, dropped by 4.4% m/m, following flat growth in January. Over the three months to February, mining output contracted by 6.7%, indicating a likely material drag on GDP growth in 1Q25.
While the weak performance may partly reflect refurbishment and stocktaking activities, it was further exacerbated by heavy rainfall and flooding that materially disrupted operations. These factors suggest the decline may be temporary, with potential for a rebound in the coming months..
Outlook
While mining output expanded modestly by 0.4% in 2024, the year-to-date decline of 5.6% remains a concern, particularly in a global environment facing downside risks from potential Trump 2.0 reciprocal tariffs. A challenging global trade landscape, subdued commodity prices, and slowing growth in China continue to pose significant headwinds for the sector. Nevertheless, ongoing reforms aimed at easing infrastructure constraints, particularly in energy and logistics, should help prevent these from becoming binding limitations on productivity over the longer term.
Selected sector analysis
Nine out of twelve mining divisions recorded annual declines in February. Among the major divisions:
On the upside:
