South African manufacturing dips for ninth month; Euro-zone contraction slows
02 Feb 2009
South African manufacturing dipped for the ninth consecutive month in January, according to a survey, on account of a global slump in demand that hit exports and compounded job losses.
Reports said that the seasonally adjusted Investec Purchasing Managers Index marginally changed to 40.7, compared against 40.1 in December 2008, quoting an email from the Cape Town-based asset manager, while clarifying that a reading below 50 denotes a contraction.
The recession in the US, Japan and European Union (EU) make up around 60 per cent of South African exports, and has taken the wind out of the sails of factory output in Africa's biggest economy. Manufacturing makes up around 16 per cent of the economy, and dropped to an annualised 6.9 per cent during the third quarter, the statistics office had said on 25 November.
Investec said its index measuring new sales orders dropped to 33.2 last month against 37.5 in December 2008 while the business activity index rose to 36.9 from 33.1. Reports said lower oil prices have taken away some of the edge of producer costs, resulting in the price sub-index dropping to 59.9, its lowest level since early 2005, quoting Investec.
Other reports said the manufacturing sector in the Euro-zone witnessed another sharp contraction in January, though the pace was a slower than December, citing the Markit euro-zone manufacturing purchasing managers index that was released this week.
The January PMI was at 34.4, slightly lower than a preliminary estimate of 34.5, even though it was higher than the all-time low of 33.9 posted in December. Reports quoted Markit as saying that the rate of deterioration in the sector "remained severe." It said that January data shows the second-steepest monthly decline in activity in the survey's eleven and a half year history.
