South Africa's seasonally adjusted Absa Purchasing Managers' Index (PMI) dipped in May, sliding back into negative terrain after two successive months of expansion in the beginning of the year, a survey showed on Friday.
The index, which is compiled by the Bureau for Economic Research and gauges manufacturing activity in Africa's most industrialised economy, fell to 49.8 in May from 50.9 in April, largely weakened by a dip in the new sales subcomponent and subdued output growth.
The business activity index, a measure of output, fell to 47.2 in May from 49.1 in April.
The new sales index fell by five points but remained above the 50 mark which separates expansion from contraction.
After expanding in the first two months of the year on optimism around policy and political changes following Cyril Ramaphosa's election as President, the PMI index has fluctuated, with a weaker currency and worries the global economy was not expanding as fast as expected weighing.
The rand has weakened about 10 percent since touching a year best of 11.51 per dollar in February raising the cost of inputs for manufacturers and while also hurting imports.
Absa however said the manufacturing sector would continue to recover, after averaging above the 50 point mark in the first quarter, contributing positively to gross domestic product (GDP).
"This bodes well for a recovery in the manufacturing sector, after manufacturing output contracted on a quarter-on-quarter basis in the first quarter of 2018," Absa said.
South Africa's publishes first quarter GDP figures on Tuesday.