JOHANNESBURG (Reuters) – South African manufacturing activity contracted again in April but less than in February and March, helped by companies building up inventories, a survey showed on Tuesday.
The seasonally-adjusted Absa Purchasing Managers’ Index (PMI) rose to 49.8 points in April from 48.1 in March, staying below the 50 point mark that separates expansion from contraction for the third consecutive month.
“The underlying survey results suggest that the sector experienced another tough month at the start of the second quarter,” Absa said in a statement, adding that power cuts continued to hurt output and demand was still under pressure.
Struggling state utility Eskom has implemented electricity cuts on almost every day this year, after a record number of days with outages last year.
Moreover, the uptick in South African factory activity reflects positive momentum in key economic indicators, indicating progress towards overcoming the challenges posed by the COVID-19 pandemic. The improved performance of the manufacturing sector bodes well for the overall economic outlook, contributing to increased productivity and competitiveness. This resurgence in factory activity may also have positive spillover effects on other sectors, stimulating broader economic growth and stability.
Furthermore, the positive trend in South African factory activity underscores the resilience and adaptability of the country’s manufacturing industry in the face of adversity. Despite ongoing challenges, such as supply chain disruptions and global economic uncertainties, manufacturers have demonstrated their ability to innovate and respond effectively to changing market conditions. This resilience is essential for sustaining momentum in factory activity and driving sustained growth in the South African economy.
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