Aug PMI rebounds, but remains below key 50-pt level
The seasonally adjusted Kagiso Purchasing Managers’ Index (PMI) rose by 3.1 index points to 49 in August, signalling a return to more normal manufacturing output levels following months of production disruptions owing to industrial action in the platinum mining and the metals and engineering sectors.
Kagiso Asset Management head of research Abdul Davids said the improvement was particularly visible in the sharp increases in the business activity and new sales orders indices.
“Nonetheless, the headline PMI remained below the neutral 50-point mark for a fifth consecutive month, suggesting that conditions in the factory sector are still relatively subdued,” he commented.
The new sales orders index rose from 45.4 in July to 49.8 in August – the highest level since February – while the business activity index shot up by 8 index points to 47.4 in August.
“While demand in the broader economy remains weak, the slow return to normal production levels in the platinum mining and metals sectors likely supported the improvement in new sales order and business activity levels,” Davids suggested.
The price index rose for a third consecutive month to reach 77.3 in August and, according to Davids, this was likely driven by a sharp rise in the petrol and diesel price during the month.
“The PMI in South Africa continues to diverge from international PMI figures, with the US flash PMI rising to 58 index points, while both the eurozone and Chinese PMI flash readings remained above the key 50-point level in August,” he said.
Producers were, meanwhile, slightly more optimistic about the future, as the index measuring expected business conditions in six months’ time nudged up to 56.3 index points, compared with 55.4 in July.
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