Manufacturing activity in South Africa shrank for the seventh month in a row in August, according to the Absa Purchasing Managers' Index (PMI).
The seasonally-adjusted PMI rose to 49.7 points in August from 47.3 points in July, but it stayed below the 50-point mark that separates expansion from contraction.
Market expectations ahead of the release predicted that the PMI would remain in contractionary territory for the seventh straight month.
Absa said the main factors contributing to the contraction were the minibus taxi strike in the Western Cape, which prevented many people from going to work, and the rolling blackouts enforced by state-owned power utility Eskom.
“Anecdotal evidence suggests that several manufacturing facilities were impacted by worker absenteeism associated with the strike,” Absa stated.
The business activity sub-index saw a jump of almost 12 points in August, reversing the sharp decline of almost 11 points in July, although at 50 points the sub-index pointed to flat month-on-month manufacturing production.