According to a survey conducted on Monday, the manufacturing sector in South Africa experienced a contraction for the fifth consecutive month in June. This decline can be attributed to the deterioration of business conditions.
In June, the seasonally-adjusted Absa Purchasing Managers’ Index (PMI) recorded a decline to 47.6 points, compared to 49.2 points in May. This further shift below the critical threshold of 50 points signifies a continued contraction in the manufacturing sector, highlighting the division between expansion and contraction.
In a statement, Absa noted that the manufacturing sector is being significantly impacted by weak demand. The decline in export sales has further intensified, while domestic demand continues to face significant pressure. This has led to a downturn in the new sales orders index, indicating a key factor contributing to the sector’s challenges.
Absa also added that despite the current challenges, the survey suggests that business conditions are expected to improve by the end of the year. This indicates a glimmer of optimism for the manufacturing sector, offering hope for a potential turnaround in the coming months.