PMI falls below 50 points in May

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Despite the ongoing reprieve in rolling blackouts – activity in the manufacturing sector remains sluggish.

ABSA’s Purchasing Manager’s Index (PMI) fell below 50 points in May 2024.

The latest drop in manufacturing activity has been largely driven by the significant decline in demand. Numerous respondents said that orders were put on hold as clients waited for the election results.

The PMI has contracted for three out of five months this year as the manufacturing sector seems volatile in an election year.

The business activity index declined to 38.1 points in May from 57.2 points in April. And new sales orders also declined in the same period.

Domestic demand remains sluggish amid sustained high interest rates and low credit extension.

Respondents say that orders are drying up as consumers seem to be focusing on necessities.

However, it’s not all doom and gloom, the index for expected business conditions in six months’ time increased in May compared to April.