South Africa’s purchasing managers’ index dropped for a second month in April as an economic slowdown in Europe damped demand for manufactured goods, Kagiso Tiso Holdings said.
The seasonally adjusted index fell to 53.7 from 55.1 in March, Johannesburg-based Kagiso said in an e-mailed statement today. An index level above 50 indicates an expansion in factory output. The median estimate of five economists surveyed by Bloomberg was for the index to decline to 53.6.
“There are indications that the Index could moderate even further,” Abdul Davids, head of research at Kagiso, said in the statement. “This is in line with the trend we are currently seeing in Europe, South Africa’s key manufacturing export market.”
Europe will probably enter another recession this year as European governments tighten spending to help ease a debt crisis that began with Greece more than two years ago. Europe buys about a third of South Africa’s manufactured goods. Manufacturing makes up about 15 percent of the continent’s largest economy. The U.K. and Spain have already entered a recession, the governments of both nations confirmed last week.
The index measuring new-sales orders fell 4.3 points to 55.4 last month and the business activity sub-index was little changed at 57.7, Kagiso said. The price sub-index fell 1.8 points to 71.1, the lowest level since January 2011, the financial-services company said.
The Bureau for Economic Research, based at the University of Stellenbosch near Cape Town, and the Institute of Purchasing and Supply South Africa conduct the PMI survey on behalf of Kagiso.
To contact the reporter on this story: Andres R. Martinez in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew J. Barden at email@example.com