South African manufacturing activity shrank at a faster pace in October, dragged down by weak domestic demand and adverse global events despite an improvement in power supply.
The seasonally adjusted Absa Purchasing Managers' Index (PMI) fell to 45.4 points in October, from an upwardly revised 46.2 in September, further below the 50-point mark that separates expansion from contraction.
South African bank Absa, which sponsors the PMI survey, said in a statement that it was “perplexing” that the index had fallen despite an easing of rolling power cuts, known locally as load-shedding, in October.
“With key units of the Kusile power station resuming operations earlier than expected and the associated reduced load-shedding in October, adverse global events seem to have driven the poor expectations reading,” Absa added.
The sub-index measuring expected business conditions in six months was down by more than 12 points in October, while the business activity sub-index saw a slip of almost 3 points, probably reflecting constrained demand for manufactured goods.
REUTERS