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The business activity sub-index saw a sharp drop to 49 from 55.6 in the prior month, while new sales orders fell to 45.9 from a previous 54.8. The six-month expected business conditions index remained steady at 62.3, indicating that factories expect business conditions to remain supportive, the lender said.
Sentiment among South African manufacturers snapped back to negative territory in November as weak domestic demand weighed on the industry and Donald Trump’s victory in last month’s US election muddied the global political outlook.
Absa Group’s purchasing managers’ index, compiled by the Bureau for Economic Research, fell to 48.1 from 52.6 in October, the Johannesburg-based lender said. Two economists surveyed by the wire agency, Bloomberg, had predicted a drop, though they both expected the gauge to remain in expansionary territory above 50.
Sentiment eased even after South Africa’s state power utility stabilized the electricity supply, the inflation rate fell below the midpoint of the central bank’s 3% to 6% target band, and a reduction in interest rates raised expectations of increased consumer spending.
While the decline in the sentiment index marks a loss of momentum in the recovery seen in recent months, conditions are not as bad as a year earlier, Absa said.
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The business activity sub-index saw a sharp drop to 49 from 55.6 in the prior month, while new sales orders fell to 45.9 from a previous 54.8. The six-month expected business conditions index remained steady at 62.3, indicating that factories expect business conditions to remain supportive, the lender said.
