X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Absa Purchasing Managers’ Index dips in June, signall...

Business Maverick

ECONOMIC OUTLOOK

Absa PMI dips in June, signalling deterioration in manufacturing demand and activity

Workers wearing protective face masks work on an automobile as social distancing markers sit on the floor on the production line at the BMW South Africa Rosslyn plant in Midrand, South Africa, on 29 May 2020. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

The Absa Purchasing Managers’ Index (PMI) declined slightly in June to 52.2 points, which is no train smash as it at least remains in positive territory. But the business activity subindex suggests output in the manufacturing sector declined during the second quarter (Q2) of 2022. And the survey was taken before Stage 6 load shedding kicked in.

Absa said on Friday that its PMI dipped to 52.2 in June from 54.8 in May. The PMI boils down to a measure of confidence among purchasing managers in the manufacturing sector, and so it’s a key indicator of the industry’s health. So on the bright side, it remained just in positive territory in June as its range is zero to 100. 

But as Absa noted, the “headline PMI masks a worrying deterioration in demand and activity during the month. The business activity index signalled a contraction in output for a third consecutive month. Indeed, the average level for the second quarter [45] is much lower than the average recorded in the first quarter [58.9]. 

“Along with the stark decline in actual factory output in April, this suggests that after a stellar performance at the start of the year, the sector is likely to be a big drag on GDP in the second quarter. This is as the destructive flooding in KwaZulu-Natal, sustained supply chain friction and significant load shedding weigh on output.” 

There was also a sharp drop in the index tracking expected business conditions in six months’ time.

“The index fell to 53.8 in June, down by almost 10 points from May. This is the least optimistic purchasing managers have been this year. The majority of the responses were received before the recent ramping up of the intensity of load shedding,” Absa said. 

This bodes well for economic growth prospects in Q2 after the overall economy grew a faster than expected 1.9% quarter on quarter, in Q1, bringing output back to pre-pandemic levels. 

Still, not all of the economic data from June is dour. 

The National Automotive Business Council, or Naamsa, reported on Friday that on a year-on-year basis, new vehicle sales in South Africa rose 7.6%. And export sales were up 18%, which is a good sign for local car makers. 

But in the wake of Stage 6 load shedding, sentiment is bound to dim further. DM/BM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted