March 20 (Bloomberg) -- South African manufacturing confidence tumbled in the first quarter as the global economic crisis slashed export demand, the Bureau for Economic Research said.

The manufacturing business confidence index fell to 16 from 31 in the previous three months, the bureau, based at the University of Stellenbosch near Cape Town, said in an e-mailed statement today.

“The impact of the global economic crisis, which exacerbated the domestic economic slowdown already in motion, seems to be bringing the sector to its knees,” the bureau said. “Retrenchments of factory workers continued to increase as production plummeted.”

Official data shows that manufacturing, which accounts for 16 percent of the economy, plunged a record 11.1 percent in January from a year ago, threatening to push the economy into recession. A collapse in car sales in the U.S. and Europe have forced manufacturers such as ArcelorMittal South Africa Ltd., Africa’s biggest steelmaker, and Volkswagen AG, the country’s second-largest automaker, to scale back production and fire workers.

South Africa’s economy, the biggest on the continent, contracted for the first time in a decade in the fourth quarter, with output dropping an annualized 1.8 percent.

To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net

Last Updated: March 20, 2009 06:38 EDT