The seasonally adjusted Absa Purchasing Managers' Index (PMI) fell for a third consecutive month in March, hurt by a dip in business activity due to power cuts and lower new sales orders, a survey showed on Monday.
The index, which gauges manufacturing activity in Africa's most industrialised economy, fell to 45 points in March from 46.2 in February, staying below the 50 mark that separates contraction from expansion.
The new sales orders index edged lower by 0.5 points to 42.4, Absa said in a statement.
"Weaker demand likely contributed to a further dip in the business activity index to 41.7 points. Output was likely also affected by consecutive days of (daytime) load-shedding, hampering production for factories without alternative power sources," Absa said.
This year South Africa has experienced its worst power cuts in several years, as cash-strapped utility Eskom struggles with capacity constraints. Eskom has not implemented rolling blackouts since March 23, but has warned the power system remains vulnerable.
South Africa's power crisis threatens to stymie President Cyril Ramaphosa's efforts to boost economic activity after a decade of slow growth.