Annual growth in South Africa's factory output outpaced expectations in March, suggesting the recovery in the supply-side of the economy is on track and backing the case to leave interest rates unchanged.

Statistics South Africa said on Wednesday manufacturing output rose by 6.3% year-on-year in volume terms in March, accelerating from 2.7% in February, much higher than the 2.9% expected by economist in a Reuters poll.

On a monthly basis, factory production in volume terms rose by a seasonally-adjusted 2.6% in March and increased by 1.5% in the first quarter of 2010 compared with the fourth quarter of 2009.

The manufacturing sector is a key contributor to economic growth and helped the biggest economy in Africa exit its first recession since 1992 in the third quarter of last year.

Reported by Reuters