This archive report was first published on 5 August 2020.
On July 1, 2020, South Africa's manufacturing sector experienced a slowdown, as indicated by the Absa Manufacturing Purchasing Managers' Index (PMI), which fell to 51.2 from a near seven-year high of 53.9 in June.
Despite the recovery in business activity, new orders rose at a slower pace than in the previous month, and job numbers decreased.
The Absa Manufacturing PMI is a monthly survey of purchasing managers in South Africa's manufacturing sector, providing leading indications of business conditions in the sector.
According to Absa, some respondents noted that output remained below pre-lockdown levels.
Additionally, the index tracking business conditions in six months rose to the highest level in a year, but still remained 'fairly subdued' compared to the long-term average.
South Africa had implemented stringent lockdown rules in late March to curb the spread of the coronavirus, but has since eased some of these restrictions, allowing several vital industries to operate at full capacity subject to health and safety protocols.
The Bureau for Economic Research compiles the Absa Purchasing Managers' Index (PMI) with sponsorship from Absa, which is based on a similar index produced by the Institute for Supply Management (ISM) in the USA.
The PMI looks at the level of Business Activity, New Orders, Employment, Supplier Deliveries, and Inventories, with an index value of 50 indicating no change in activity, a value above 50 indicating increased activity, and a value below 50 indicating decreased activity.
