South Africa's purchasing manager's index (PMI) dropped for the second time in April to 53.7 from 55.1 in March, indicating slowing factory output expansion. The decline was caused by slowing demand from Europe, South Africa's key manufacturing export market, as the economic slowdown in Europe continues. Manufacturing accounts for 15% of South Africa's economy and the situation in Europe is expected to negatively impact South Africa's economic growth. Survey respondents also reported declines in new sales orders and prices in April.

1. By Sihle Masuku
South Africa’s PMI down for Second time in
April
The economic slowdown in Europe has resulted to the South Africa’s purchasing manager’s index
dropping twice in one month. Kagiso Tiso Holdings said the current situation is being caused by
Europe’s slow demand for manufactured goods.
The index fell to 53.7 from 55.1 in March, Johannesburg-based Kagiso said in an e-mailed
statement sent to Bloomberg 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.”
Spain and the UK are already in a recession, economists predict that there is a chance that other
countries will suffer from recession after these two countries Spain and England. It is expected that the
whole of Europe might enter into another recession. The European governments will tighten spending
to help ease a debt crisis and try to prevent another recession that occurred two years ago.
Manufacturing makes up about 15 percent of the South Africa’s economy and the current
situation in Europe will have a negative impact in the country’s economy
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, and the
Institute of Purchasing and Supply South Africa conducted the PMI survey on behalf of
Kagiso.