The sentiment among South African manufacturers decreased for a second month in a row during December, influenced by sluggish domestic demand, declining export sales, and logistical challenges impacting various sectors.
According to a statement from the Johannesburg-based bank released on Wednesday, the purchasing managers’ index (PMI) from Absa Group, created in partnership with the Bureau for Economic Research, fell to 46.2 in December, down from 48.1 in November.
The sub-index measuring business activity dropped to 40.3, hitting its lowest level since August, while new sales orders fell to 37.4, also the lowest in that period.
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On a brighter note, the index reflecting expectations for business conditions in the next six months increased to 67.6, the highest since September.
“The PMI results for December underscore the challenges facing South Africa’s manufacturing sector,” Absa commented. “However, the rise in future expectations suggests that manufacturers hold optimism for a possible recovery by 2025.”
Confidence waned despite the successful maintenance of a stable power supply by the state-owned utility and the central bank’s decision to reduce borrowing rates in late November, which raised hopes for increased consumer spending.
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