The Absa Purchasing Managers’ Index (PMI) for June fell to a two-year low of 46.1, down from 50.3 in May.
- The PMI is a measure of activity in the manufacturing sector, with a score below 50 indicating a contraction in activity.
- The decline in the PMI can be attributed to a drop in new orders and output, as well as ongoing supply chain disruptions and power outages in South Africa.
- The decline in new orders was particularly sharp, with the index dropping to 40.7 in June from 50.7 in May.
- The decrease in new orders was due to a combination of factors, including weaker demand from both domestic and international markets.
- The ongoing supply chain disruptions, including those related to the Covid-19 pandemic, have led to shortages of raw materials and higher input costs for manufacturers.
- The manufacturing sector in South Africa has been struggling for some time, with declining output and job losses in recent years.
- The decline in the PMI for June suggests that the sector is likely to face continued challenges in the near future.