According to the PMI conditions in the South African manufacturing sector deteriorated at the end of the third quarter.
The Purchasing Managers’ Index declined by 4.3 points to 45.4 in September, which bodes ill for Gross Domestic Product growth in the third quarter, while supply disruption kept the reading artificially elevated. Rolling blackouts also contributed to reduced business activity.
“External and domestic demand for South African manufactured goods seems to have been under pressure, with the export index hit hard in September. This most likely reflects the weakening growth momentum in the Eurozone and the UK, both key export markets for local manufacturers,” the BER says. The PMI purchasing price index increased for the second month in a row in line with sustained rand weakness and higher international oil prices during the past month. Another significant diesel price increase is on the cards for October.
These disruptions include the lingering impact after trucks were torched on the N3 highway in July and the Western Cape taxi strike in August.
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