Manufacturing Circle optimistic about prospects of factories
By Sunita Menon - Dec 5th 2017, 10:27
Despite the Absa purchasing managers’ index (PMI) spending six months in contractionary territory, the Manufacturing Circle is adamant that manufacturing is SA’s greatest opportunity for job-rich growth.
The seasonally adjusted PMI, which measures activity in manufacturing, rose to 48.6 index points in November from 47.8 in October. While a score above 50 indicates an expanding manufacturing sector, the PMI nevertheless rose to its highest level in six months.
The breakdown of the survey showed that the improvement in the headline index was driven by a pickup in current activity, but that firms remain pessimistic about the outlook. The business activity component rose to a six-month high of 48.0, yet the expected future conditions component fell back to a three-month low of 50.0.
Manufacturing Circle executive director Philippa Rodseth said: "We [need to] continue our sustained efforts to achieve a competitive manufacturing environment, achieve a supportive international trade environment with particular reference to unfairly incentivised imports, and buy more locally manufactured product."
Last month the Circle launched its Map to a Million initiative to create one million direct jobs in manufacturing through industry interventions and government support to increase investment.
"Performance of the sector is still erratic and the manufacturing environment remains fragile. We need to actively engage in and support the initiatives mentioned so that we begin to see sustained positive growth on a sustainable and long-term basis," said Rodseth.
Manufacturing Circle chairman Andre de Ruyter said government interventions are the key to slowing down the rate of job losses and deindustrialisation in the sector.
"If manufacturing can expand to 30% of GDP, between 800,000 and 1.1-million direct jobs can be created, with five to eight times that in indirect jobs," De Ruyter said.
NKC economist Elize Kruger said: "Looking ahead, we do not expect to see a major improvement in business conditions in the manufacturing sector during the first half of 2018. However, there are signs of a modest domestic economic recovery, which in combination with improving global economic conditions could be somewhat of a positive offsetting factor."
Capital Economics’ William Jackson said the sector was expected to register positive annual growth in the fourth quarter. "Based on the PMI survey, we think the recent slump in the manufacturing sector … has continued to ease in the fourth quarter," he said.© BusinessLIVE MMXVII
Plans to reshape the clothing industry
18/06/2019 - 10:19
A master plan submitted to the Department of Trade and Industry (dti) aims to improve the country's ailing clothing and textile industry.
Trade body will have a bone to pick in poultry tarrif case
14/06/2019 - 09:30
Those with intimate knowledge of the tariff application say that ITAC's position is akin to a zero-sum game, where they may have to choose between exposing local poultry producers to cheap imports they cannot compete with, or raising consumer prices for poultry to impossibly high levels.
SA's first citrus shipment arrives in China
13/06/2019 - 15:39
The historic shipment of 5 200 tons of citrus in a breakbulk vessel has arrived at Shanghai Port in the People’s Republic of China.
Increase in sales reflect stronger second quarter
13/06/2019 - 10:41
Data from Statistics South Africa (StatsSA) showed that retail sales in April increased 2.4percent year-on-year - the strongest gain in retail trade in six months, providing further evidence that the economy began the second quarter on a firmer footing following the first quarter’s 3.2percent plunge.
Retail sales jump in April, giving hope of avoiding a recession
12/06/2019 - 15:44
SA’s retail sales jumped 2.4% in April, led by clothing retailers, adding to hopes that a technical recession may be avoided in the second quarter.