By Jason Muscat, FNB Senior Economic Analyst
December mining output surprised sharply to the downside, slowing to just 0.1% y/y, compared to 6.5% in November.
Gold production fell -12.4% y/y, cutting -2 pps off the headline number. Copper and coal production declined by -16.3% y/y and -5.5% respectively, shaving a further -1.5 pps, while PGM output contracted -1.4% y/y.
The year-on-year number was only just dragged into positive territory by continued strength in iron-ore output, which climbed 15.9% y/y, as well as higher chromium, manganese and building material volumes.
Despite a disappointing end to the year, mining finished the year 4% higher than in 2016, and is set to make a solid contribution to annual GDP.
We expect the sector to regain momentum in the first half of 2018 given strong Chinese demand, particularly for iron-ore. Commodity prices also remain supportive and we expect 2018 to deliver another year of mild growth.
