The Kagiso Purchasing Managers Index (PMI) dropped 4.3 points to 49.3 in March, back below the crucial 50 mark, driven by a sharp decline in the new sales orders index, which lost 8.2 points to 52 after a gain of 9.3 points was recorded in February.
Factory sector production also underperformed and the business activity index declined by 4.5 points to 47.7.
The main problem in March? The eurozone, which is South Africa's largest trading partner.
"The decline in the SA PMI during March corresponds with the manufacturing environment in the Eurozone, the largest foreign market for locally produced factory goods," Kagiso said in a statement
. "The initial March estimate for the EU PMI registered a decline of 1.3 points to 46.6 – a three-month low."
The setback in demand and output conditions was negative for employment in the manufacturing sector. The employment index declined by 3.1 points to 42.6.
PMI hit 53.6 in February after a reading of 49.1 in January.
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