Advertise with fastmoving.co.za
 
 

The poor PMI for September indicates that production in the manufacturing sector will be subdued.
The poor PMI for September indicates that production in the manufacturing sector will be subdued.

Bleak manufacturing outlook as PMI keeps falling

ECONOMIC NEWS

By Sunita Menon - Oct 2nd 2018, 10:23

The poor PMI for September indicates that production in the manufacturing sector will be subdued. 

The outlook for the manufacturing sector in the third quarter looks bleak.

The seasonally adjusted Absa purchasing managers index (PMI), which gauges activity in the manufacturing sector, hovered at a very weak 43.2 points in September from 43.4 the month before.

The average level of the PMI in the third quarter was 46 index points, which is the lowest average since the third quarter of 2017.

“The latest figure dashed any hope that the sharp PMI decline in August was a once-off occurrence,” Absa said in a statement.

A figure below 50 indicates contraction in the sector. The PMI is usually a good indicator of where the production numbers will head in two months.

“While high-frequency activity data from Statistics SA suggests that the economy will exit the technical recession in the third quarter, the PMI survey inspires little hope that the economy staged a strong recovery,” said Absa.

The PMI dropped slightly with declines in three of the five subcomponents of the headline index. Only the suppliers’ deliveries index came in above the neutral 50-point mark.

Business activity index rose 1.5 points in September but remained well below the neutral 50-point mark at 38.7, while new sales orders index fell even lower during September to 39.6. The employment index fell to 42, its lowest level in more than four years.

After six consecutive monthly declines, the index — which tracks expected business conditions in six months’ time — moved slightly higher in September, rising to 45.8 from 44.6.

In September, the PMI showed that activity in the manufacturing sector had dipped to its lowest level in just more than a year.

“The sector still faces many headwinds, including an increased tax burden and higher fuel prices that keep a lid on already mediocre domestic demand, while ongoing policy uncertainties are keeping investment spending hostage,” NKC African Economics economist Elize Kruger said.
Business Live 

Read more about: trade | sa economy | pmi | manufacturing | business

Related News

AB InBev to float Asian business in 2019’s second biggest IPO
22/09/2019 - 10:14
AB InBev will kick off a second attempt to spin off its Asian business in Hong Kong with the launch of an initial public offering (IPO) worth up to $6.6bn that could be the world’s second-largest flotation in 2019.

Samsung and KOO win big at the 21st Sunday Times Top Brands Awards
20/09/2019 - 15:12
Samsung and KOO have been announced as South Africa’s Overall Favourite Brands, winning the Grand Prix Awards in the respective Business and Consumer sectors of the 21st Sunday Times Top Brands Survey.

Retail sales remain muted with consumers under pressure
20/09/2019 - 14:31
Retail sales for July marginally declined to 2 percent year on year as sales growth continued to reflect a muted demand in South Africa, with consumers’ discretionary income under strain.

Embracing workforce transformation in a digital world
20/09/2019 - 13:53
Workforce transformation affects all aspects of business and companies must plan for the impact it is having and will continue to have on operations. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says the evolving business landscape means companies must start thinking now about the skills they need for the future.

Digital marketing: multi-touch attribution
19/09/2019 - 13:43
The effective tracking of digital marketing campaigns is not as easy as initially thought. One question that often pops up is: at what point did consumer conversion take place? During a campaign, it’s difficult to attribute this correctly, especially with multiple touchpoints such as display and native advertising, sponsored social posts, video ads on mobile or paid-for search results all running consecutively.