SA factory activity plummets after unrest, new Covid brakes – Absa PMI

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South African manufacturing activity declined at its fastest pace in 14 months in July, weighed down by tighter coronavirus lockdown restrictions and civil unrest in parts of the country, an investigation found on Monday.

The seasonally adjusted Absa purchasing managers index, an indicator of factory sentiment in Africa’s most industrialized economy, fell to 43.5 points in July from 57.4 points in June, falling below the 50 point bar which separates expansion from contraction.

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The July PMI was the lowest since May 2020, Absa said in a statement.

Absa said the economy was hit by several shocks during the month, including a severe third wave of Covid-19, the associated tougher lockdown restrictions, looting and arson in parts of KwaZulu provinces. Natal and Gauteng.

“The riots disrupted supply chains, industrial production and demand for manufactured goods,” Absa said in a statement.

“The severe negative impact of these events is better highlighted in the commercial activity and the new PMI orders indices. Both indices fell considerably in July.

In July riots broke out in parts of South Africa after former President Jacob Zuma surrendered to 15 months in prison for contempt of court. The unrest quickly escalated into looting that destroyed hundreds of businesses and killed more than 300 people.

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