SA factory sentiment falls; extends worst start in decade

accreditation
iStock
iStock

A gauge measuring sentiment in South Africa’s manufacturing industry declined in May, extending its worst start to a year since the financial crisis.

Absa Group’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 45.4 from 47.2 in April, the Johannesburg-based lender said in an emailed statement Monday. The reading missed the 48 median estimate of six economists in a Bloomberg survey.

Key Insights

Weakness in factory output, which contributes about 14% to gross domestic product, adds further pressure to South Africa’s attempt to recover from last year’s recession and, with a slump in mining, suggests another poor quarter after an expected contraction in the first three months. The index has been below the neutral 50 mark every month this year, making this its worst start since 2009.

The statistics agency releases GDP data Tuesday, with the median estimate in a Bloomberg survey of 14 economists showing an expected 1.6% contraction in the first quarter from the previous three months.

The sub-indexes for purchasing prices, business activity, inventories and new-sales orders declined.

The index tracking expected business conditions in six months’ time remained unchanged at 62.3, Absa said.

"This is more than 4 points above the average recorded during 2018, which means that respondents remain fairly optimistic that conditions will improve going forward."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.61
-0.2%
Rand - Pound
20.32
-0.1%
Rand - Euro
17.34
-0.0%
Rand - Aus dollar
10.72
+0.1%
Rand - Yen
0.13
-0.1%
Gold
1,814.19
0.0%
Silver
25.49
0.0%
Palladium
2,662.50
0.0%
Platinum
1,051.86
0.0%
Brent Crude
75.41
+0.4%
Top 40
62,852
-0.9%
All Share
68,971
-0.9%
Resource 10
70,683
-2.0%
Industrial 25
88,051
-0.4%
Financial 15
12,906
+0.6%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
In light of the recent looting, do you think a basic income grant is the right approach to deal with SA’s hunger and poverty problems?
Please select an option Oops! Something went wrong, please try again later.
Results
It will go a long way in helping fight the symptoms of SA’s entrenched inequality, especially for those who are starving right now
20% - 1492 votes
SA’s problems are complex, and we instead need to spend that money on building and growing our economy, which will help the country in the long run
31% - 2313 votes
All grants are a problem as they foster a reliance on handouts
49% - 3655 votes
Vote