The Absa Purchasing Managers’ Index (PMI) for May fell to 42.5 from 44.4 in April. A reading below 50 suggests a contraction in the sector, while a reading above 50 suggests expansion.
- The decline in May was attributed to weaker demand, both domestically and internationally, as well as supply chain disruptions and higher input costs.
- The decline in the PMI is concerning as it suggests that the manufacturing sector is not yet recovering from the impact of the COVID-19 pandemic and related lockdowns.
- The manufacturing sector is an important contributor to employment and exports in South Africa, so the decline in the PMI could have negative implications for the broader economy.