The Absa purchasing managers’ index (PMI) declined to 47.1 index points in December 2019 from 47.7 points recorded in November due to load shedding, said the South African bank on Wednesday.
The bank said the manufacturing sector throughout the year performed badly since the PMI only managed to edge above the neutral 50 point mark for two months in the year.
“Bouts of load shedding and persistent weak domestic demand coupled with more intense headwinds from the global economy likely weighed on activity during the year,” said Absa in a statement.
The new sales orders index slumped to record the lowest level seen in 2019. Part of this may stem from weaker external demand as respondents noted a drop in exports for a second consecutive month
Driven by the drop in demand, business activity also fell in December. Many respondents said electricity disruptions pushed them to lose production time.
The Absa PMI is compiled by the Bureau for Economic Research and sponsored by the bank. Enditem