Market Commentary and Intraday News

South Africa's Manufacturing Activity Falls For Second Month

201 days ago

(RTTNews) - South Africa's manufacturing sector contracted for the second successive month in October, and the rate of fall accelerated from the previous month, due to notable declines in order intakes and production, data released by the Kagiso Group showed Thursday.

The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector declined to 47.1 in October from September's upwardly revised 48.3, indicating a steeper deterioration in business conditions. A PMI reading below 50 indicates contraction in the sector, while one above suggests growth. The index now declined for the third successive month, hitting the lowest level since July 2011.

New sales orders received by firms decreased at a steeper rate during the month, reflecting softer demand for manufactured products. In line with the fall in new business, manufacturers reduced production further. Input price inflation, meanwhile, continued to accelerate.

The prolonged strikes in South Africa's mining sector and isolated industrial action in the vehicle manufacturing sector may have contributed to the weakness of the October, the agency said.

Manufacturers, meanwhile, remained more optimistic about prospects for business conditions in the next six months, with the relevant sub-index rising by 1.6 points to 57.1 in October.

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