South Africa's manufacturing output rose by a seasonally adjusted 1,8% in the second quarter of 2004, slowing slightly from the first quarter, official figures showed yesterday.

Manufacturing accounts for nearly a fifth of the economy and emerged from a prolonged recession in the first quarter of this year, when it expanded by 2,3%, shrugging off the negative impact of the strong rand on the country's exports.

Economists said the data was broadly in line with expectations, and showed that the sector was adjusting to the impact of the currency's gains, which have amounted to more than 9% against the dollar so far in 2004.

"The sector is still growing. We still expect positive growth this year, albeit at slightly softer levels," JP Morgan analyst Marisa Fassler said.

There was no market reaction to release of the figures, which have a longer time lag than other key South African data.

During June manufacturing output rose by a year-on-year seasonally adjusted rate of 5,1%, quickening from 3% in May, the data showed. Compared with the previous month, it edged up by 0,2%, also on an adjusted basis. – Reuters.