PMI falls for third consecutive month
The new sales orders index fell to 42.4 in March suggesting that demand in the first quarter was weaker than during the fourth quarter of 2018
Factory owners experienced another decline in activity in March as power cuts persisted.
The seasonally adjusted Absa purchasing managers’ index (PMI) fell for a third consecutive month to 45 points in March from 46.2 in February.
The index gauges activity in the manufacturing sector and a score below 50 indicates a contraction. Manufacturing accounts for about 13% of GDP.
Two of the PMI’s major sub-components came in above 50 points, while three were stuck in negative terrain, one saw a decline.
The new sales orders index edged lower by 0.5 points to reach 42.4 in March suggesting that demand in the first quarter was weaker than during the fourth quarter of 2018.
“This seems to stem from a deterioration in export performance while domestic demand conditions also remained poor,” Absa said in a statement on Monday.
“Exporters are faced with slower global growth, particularly in the eurozone which is a key trading partner.”
The business activity index was 41.7 points “affected by consecutive days of load-shedding, hampering production for factories without alternative power sources”.
This also saw a dip in the employment index which fell 5.4 points to reach 42.7 in March.
While the monthly survey tends to be a good predictor of the manufacturing production and sales figures Stats SA provides two months later, it has been volatile in recent months.