Activity in the manufacturing sector declined for the second consecutive month in March, pointing to deteriorating business conditions in the sector, according to the Absa's Purchasing Managers Index . The seasonally adjusted index, which fell to 48.1 points in March from 48.8 in February, follows a sharp decline in February, seeing the index tumble from 53 index points in January to 48.8 in February.
Signs of a faltering demand were visible as reduced new sales orders recorded the worst performance throughout the entire first quarter in March. Absa’s senior economist Miyelani Maluleke said: Maluleke added businesses were more optimistic about the next six months in March than they were in the preceding month. The index tracking expected business conditions in six months rose to 55.5 from 46.8 in February. He added that while purchasing managers were generally expecting conditions to look better later this year, the long-term average of this index was well above the current reading, suggesting less optimism than usual.
The domestic economy is facing major headwinds with most economists estimating a growth of below one percent for 2023. Last week, the Reserve Bank downwardly revised its growth projections even further from 0.3% earlier to 0.2% as load shedding decimated growth. Load shedding is estimated to shave off two percentage points from annual growth this year.
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deindustrialization