Industrial activity in the South African manufacturing sector returned to strong growth in August following a record single-month decline in July.
The Absa Purchasing Manufacturers Index (PMI) more than recovered from last month’s steep decline, rising to 57.9 points in August from a very low 43.5 points in July.
In July, the PMI reading fell to the lowest level since May 2020 as the manufacturing sector suffered severe supply chain disruptions due to civil unrest and lockdown restrictions.
Absa said both the output and new orders sub-indices recorded solid improvements during the month.
According to Absa senior economist Miyelani Maluleke, the recovery was always on the cards in August due to normalisation of demand and output for businesses affected by July’s looting, and a further boost from less strict lockdown restrictions.
Maluleke said the extent of the rebound was nonetheless encouraging, especially on the orders and activity front.
“That being said, even if September’s headline PMI print remains at the elevated level seen in August, the third quarter as a whole will be lower than the second quarter due to the severity of the shock experienced in July,” said Maluleke.
The PMI showed that both the business activity and new sales order indices erased July’s losses and returned to levels slightly above those seen in June.
Business activity came in at 58.5 points and new sales orders at 60.9 points, both about 30 points better than July’s print.
