South Africa’s manufacturing sector contracted for a fourth consecutive month in December, a survey by Bureau for Economic Research, CIPS Africa and Kagiso Tiso Holdings revealed Wednesday.
The purchasing managers’ index fell to 47.4 in December from 49.5 in November. Economists expected the index to rise to 50.2. An index reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction.
The index has now remained below the no-change mark for four successive months. This is a trend last observed during the 2008-09 recession.
The December decline was to a large extent influenced by the employment sub-component. The index fell by 7.3 points from a month earlier to 44.7 in December. The employment index is now at the lowest level since August 2011.
On the production front, the result was more encouraging. The business activity index gained 1.4 points to 47.3, the best level since August 2012.
However, “the sustainability of the gains is unclear as the demand for manufactured goods remained soft,” the report said, adding that the new sales orders index fell by 2.8 points to 44.9.
The input price index stabilised at 79.7 in December, suggesting elevated input cost pressures.
by RTT Staff Writer
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