South African factory activity shrinks for 7th month in August: Absa PMI

JOHANNESBURG (Reuters) – South African manufacturing activity shrank for the seventh month in a row in August, but at a slower pace than in the previous month, as a minibus taxi strike in Cape Town prevented many commuters from getting to work.

The seasonally-adjusted Absa Purchasing Managers’ Index (PMI) rose to 49.7 points in August from 47.3 points in July, but it stayed below the 50-point mark that separates expansion from contraction.

The business activity sub-index saw a jump of almost 12 points in August, reversing the sharp decline of almost 11 points in July, although at 50 points the sub-index pointed to flat month-on-month manufacturing production.

South African bank Absa, which sponsors the PMI survey, said in a statement that output constraints in August included rolling power cuts and the Western Cape taxi strike.

“Anecdotal evidence suggests that several manufacturing facilities were impacted by worker absenteeism associated with the strike,” it said.

(Reporting by Tannur Anders; Editing by Alexander Winning)