South Africa’s seasonally adjusted Purchasing Managers’ Index (PMI) fell by 1.4 points to 50.3 in March, mainly due to a sharp drop in the new sales orders sub-index amidst prolonged mining strikes, the sponsor of the survey Kagiso Tiso Holdings said in a statement. The country’s manufacturing industry is thus underperforming developed economies, with the PMI standing at 55.5 in the US and at 53.0 in the Eurozone, but is better off peer China, which saw its PMI drop to an eight-month low of 48.1.

South Africa’s PMI managed to remain above the 50 mark that separates expansion from contraction for a second straight month and reached an average of 50.6 for the first quarter, indicating that the manufacturing sector is struggling to gain any real momentum, according to Abdul Davids, Head of Research at Kagiso Asset Management.

South Africa’s new sales orders sub-index plunged to 46.6 last month from 53.4 in February, with Davids attributing the decline to a weaker domestic demand, reflecting the prolonged production stoppages in the platinum mining sector, which halted the need for supplies from specific manufacturing sub sectors.

On the positive side, the business activity sub-index rose to 51.0 in March after staying below 50 in the three months before, suggesting a moderate acceleration in output. However, the average reading of 49.1 for Q1 implies that the contribution of the manufacturing sector to GDP growth will be much more subdued than in Q4 2013.

The price sub-index eased slightly from February’s record high of 95.1 to 93.0 in March. Davids commented that the index remained “exceptionally high”, suggesting significant pressure on input costs, likely driven by the weak rand. According to the latest available data from Statistics South Africa, producer prices rose 7.7% y/y in February, speeding from a 7.0% y/y growth in January and an average rise of 6.0% in 2013.

The sub-index measuring expected business conditions in six months’ time fell to 54.5, its lowest level since September 2013, which shows that while manufacturers are less optimistic, they still hope that conditions will improve.