South African manufacturing activity slumped in August, erasing the previous month's gains and pointing to highly volatile business conditions, a Purchasing Managers' Index (PMI) survey showed on Monday. The seasonally-adjusted PMI for the factory sector dropped to 43.6 points in August from 52.4 in July, falling well below the 50-point mark shows growth.
"This decline underscores the challenges the sector faces amid ongoing political uncertainty, high but slowing inflation, elevated borrowing costs, and sluggish demand both globally and domestically," local bank Absa, which sponsors the survey, said in a statement.
"These factors have hampered the sector's ability to maintain the momentum seen in July, leading to the fifth month in 2024 where the PMI has fallen into contractionary territory," the statement added. The 8.8-point decline in the PMI in August eclipsed the 6.7-point increase in July.
