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4 November 2021 – South African manufacturing activity expanded at a slower pace in October as a strike and power cuts weighed on companies in the sector, a survey showed on Tuesday.
The seasonally-adjusted Absa Purchasing Managers’ Index (PMI) fell to 53.6 points in October from a revised 54.7 points in September, remaining above the 50-point mark that separates expansion from contraction.
The business activity index fell to 46.1 points in October from 49.9 points the prior month, while the new sales orders index declined to 48.0 points from 53.0 points.
In a statement accompanying the survey’s findings, Absa said two key developments in October explained the drop in business activity.
“These are the three-week strike in the steel and engineering sector and the return of Eskom load-shedding (power cuts) for notable periods during the month,” Absa said.
“Seen in isolation, these adverse events had the potential to push the business activity index, orders and the overall PMI even lower.”
State power utility Eskom, which runs a fleet of ageing coal-fired power plants that regularly break down, implemented scheduled power cuts in October for the first time since July. The outages are a major constraint on economic growth in Africa’s most industrialised nation. Source (Nasdaq)