CAPE TOWN - South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell further into contraction territory in November as business activity and new sales orders slowed, the survey showed on Monday.
The index, which gauges manufacturing activity in Africa’s most industrialised economy, fell to 47.7 in November from 48.1 points in October, well below the 50-point mark that separates expansion from contraction.
“The weak readings on the business activity index seen in the fourth quarter so far argue against a strong, if any, recovery in manufacturing output,” Absa said in a statement.
"Demand remained under pressure with the new sales orders index not being able to hold on to all of last month’s gains. Respondents saw a decline in export demand during the month. The only major subcomponent to record an improvement compared to the previous month was purchasing inventories, which picked up from a ten-year low reached in October. Notwithstanding the increase, the index remained well below the neutral 50-point mark. The only subcomponent to come in above 50, which generally points to improving conditions, was the supplier deliveries index," Absa said.
"On a more positive note, respondents turned slightly less pessimistic about the near-term future. The index tracking expected business conditions in six months’ time increased to 47.4 index points in November after recording five consecutive declines. Nonetheless, despite the uptick, the latest reading means that conditions are still expected to worsen in six months’ time, albeit less so than before,"Absa's statement concluded.
REUTERS/ BUSINESS REPORT ONLINE