South African manufacturers turn gloomy again
By Robert Laing - Apr 3rd 2018, 18:34
After briefly turning optimistic in February, South African factory managers were back on the pessimistic side of the monthly manufacturing purchasing managers index (PMI), Absa reported on Tuesday.
March’s PMI fell 3.9 points to 46.9 points, from February’s 50.8 points.
February marked the first time the index had been on the optimistic side of 50 points since May 2017.
The monthly poll of factory managers by Stellenbosch University’s Bureau of Economic Research (BER) tends to be a good forecaster of the manufacturing output and sales data Stats SA releases about two months later.
A score above 50 indicates SA’s manufacturing sector is expanding, and below 50 that it is contracting.
One of the components of the index that dragged it back under 50 in March was business activity, which fell 8.1 points to 46 in March from 54.1 in February.
Another sharp drop, of 8.2 points, was recorded by new sales orders, taking it down to 44.5 in March from 52.7 in February.
"Respondents indicated that exports declined during the month, which could explain the deterioration in overall sales orders. Exports could be affected by the stronger rand exchange rate of late, which can weigh on competitiveness of local goods in international markets. The dip in demand, in turn, filtered through to lower activity levels," the report said.
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