Sentiment in South Africa’s manufacturing industry slipped in November, signalling contraction in the industry for a fourth straight month.
Absa Group Ltd.’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 47.7 from 48.1 in October, the Johannesburg-based lender said in an emailed statement on Monday.
- The PMI has been below 50, showing contraction, for all but two months of the year. The industry accounts for about 13% of gross domestic product and the persistent poor confidence has damped growth in an economy stuck in its longest downward cycle since 1945.
- The index tracking business activity slumped to 39.4, suggesting chances of a recovery in manufacturing are slim. New sales orders also dipped, with respondents seeing a decline in export activity, while the one tracking expected conditions in six months edged up, yet still below 50.
- “The weak readings on the business activity index seen in the fourth quarter so far argue against a strong, if any, recovery in manufacturing output,” Absa says.