South Africa's manufacturing industry falls to all-time-low due to lockdown
Business activity in South Africa's manufacturing industry fell to 46.1 percent in April.
According to Absa’s Purchasing Managers’ Index, business activity in South Africa’s manufacturing industry fell to a record low 46.1 percent in April due to lockdowns being implemented countrywide to stop the spread of Covid-19.
The Index stated that the low business activity reading, which is some 25 points lower than it was during the global financial crisis, suggests that the decline in actual manufacturing output will be a lot more than the 23 percent annual fall recorded in April 2009.
Even though the South African government has started easing lockdown restrictions, some manufacturing capacity will remain idle. Because manufacturing is only expected to return to full capacity at level one of lockdown, the Index expects manufacturing business conditions to fall to a record low of 27.3 percent in six months’ time.
Further estimates from the National Treasury show that the country’s economy could contract by 16.1 percent this year, depending on how long it takes to contain the virus, the duration of lockdown and how long it will take for the economy to recover.