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Johannesburg - South Africa's seasonally adjusted purchasing managers’ index (PMI) fell to 48.2 in June from 53.6 in May, dropping into
contraction territory for the first time since December and dampening the
outlook for overall economic growth in the second quarter.
The PMI, a key measure of manufacturing activity, was at its
lowest level since August 2011, with most of the sub-indices recording
significant declines, sponsor Kagiso Tiso Holdings said in a statement on
Monday.
“In addition to weaker external demand, the latest figures
indicate a sustained and worsening slowdown in domestic demand as the New Sales
Orders Index, the largest weighted sub-index, fell by 5.2 points to reach a
level of 46.5,” said Abdul Davids, head of research at Kagiso Asset Management.
The weak PMI suggests domestic growth slowed in the second quarter of 2012 and backs the case for monetary loosening later this year. Factory output contributes about 15% to gross domestic product.
