South African factory activity shrinks on unrest, Covid-19 restrictions - PMI

4th August 2021

By: Reuters

  

Font size: - +

South African private sector activity fell at its fastest rate in ten months in July as output tumbled in the wake of civil unrest in some parts of the country and tighter coronavirus lockdown restrictions, a survey showed on Wednesday.

IHS Markit's Purchasing Managers' Index (PMI) fell to 46.1 in July from 51.0 in June, dropping below the 50-point mark that separates expansion from contraction for the first time since September 2020.

Alongside a sharp fall in output, whose sub-index dipped to 39.1 in July from 48.8 in June, new orders, employment and stocks of purchases also declined, IHS Markit said.

"The South African economy saw a marked impact from civil unrest in July," said IHS Markit economist David Owen.

"After nine consecutive months of growth, the downturn was the first notable setback in the country's economic recovery, as the hit to consumer confidence added to the impact of a return to 'Level 4' (coronavirus) lockdown."

In July, riots broke out in several parts of South Africa after former president Jacob Zuma handed himself in to start a 15-month jail term for contempt of court. The unrest swiftly degenerated into looting, which destroyed hundreds of businesses and killed over 300 people.

Owen said that, while the easing of the coronavirus lockdown restrictions late in July may help restore some confidence, many businesses faced a prolonged period of recovery after suffering damage from the riots.

"Supply chains will also take longer to rebuild, particularly amid ongoing difficulties sourcing and supplying raw materials due to the pandemic," Owen said.

Edited by Reuters

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION