The Absa Purchasing Managers' Index (PMI), a key indicator of the manufacturing sector's health, declined 1.6 points in June to 47.6, its lowest level since mid-2021.

At 47.6, the PMI slid further into negative territory, as 50 is the neutral mark. And that was not the only worrying signal from the latest survey of purchasing managers in the manufacturing sector.

"For the first time since 2018, all five subcomponents used to calculate the headline PMI were below the neutral 50-point level, pointing to a worsening of business conditions in the sector," Absa said.

"A key drag on the sector seems to come from weak demand, with the new sales orders index edging down once again as the decline in export sales deepened and domestic demand remains under pressure."

This points to a softening of demand on both the domestic and export fronts. In the case of the former, rising interest rates, slowing but still elevated inflation and an economy that is barely growing in the face of the power crisis have all combined to sink demand for manufactured products. And a slowdown in the global economy is clearly taking a toll on South African exports.

"On a more positive note, the business activity index improved relative to May, although it remained below the neutral 50-point mark for a fifth consecutive month.

"The index rose from 47.7...