Page 5 - AfrElec Week 40 2022

AfrElec POLICY AfrElec

SA manufacturing output falls to

14-month low during energy crisis

SOUTH AFRICA BUSINESS activity in South Africa’s manu- borrowing costs supported the negative
facturing industry fell to a 14-month low in sentiment.
September as electricity-supply constraints in South Africa is suffering an energy crisis as
the country disrupted operations, Bloomberg Eskom, which produces almost all of the nation’s
reports. electricity, struggles to meet demand. It has
According to a survey by the Bureau for Eco- imposed a record 119 days of outages so far in
nomic Research (BER), the seasonally adjusted 2022, according to Bloomberg calculations.
Absa Purchasing Managers’ Index fell to 48.2 “Overall, the PMI results do not bode well
points in September 2022 from 52.1 in August, for a strong recovery in actual manufacturing
pointing to a renewed contraction in the coun- production from a bleak second quarter,” Absa
try’s manufacturing activity. said. While the sector, which accounts for 13%
Extensive power cuts weighed on output of gross domestic product, isn’t expected to per-
and new sales orders declined, Absa said in form as poorly as in the prior quarter, a strong
a statement on October 3. “Even if it does not rebound is unlikely, it said.
have a direct impact on curtailing output, some Manufacturing was among the seven indus-
respondents flagged that load-shedding weighs tries that contracted in the three months through
on demand for their products due to lower activ- June, writes Bloomberg, after severe floods in
ity elsewhere.” KwaZulu-Natal province in April halted oper-
Additionally, the group said, ongoing con- ations at vehicle-manufacturing plants and the
cerns over the global economy due to higher nation’s main port of Durban.™

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