Sep 03, 2012
Kagiso PMI shows marginal decline in AugustBack
Energy|Kagiso Asset Management|Energy|Manufacturing Sector|Product|Abdul Davids
© Reuse this
The seasonally adjusted Kagiso Purchasing Managers Index (PMI) remained relatively stable in August, losing a marginal 0.8 index points to a level of 50.2.
This placed the average PMI reading for the first two months of the third quarter at 50.6, which is lower than the average levels achieved in the first and second quarters of 2012, of 55.4 and 51.8, respectively.
The August PMI is down from 51 points in July, but higher than the 48.2 points recorded in June.
Kagiso Asset Management head of research Abdul Davids expected the manufacturing sector to once again place a drag on overall gross domestic product growth during the third quarter.
The new sales orders index, which continued to be quite volatile, lost 5.3 points and fell back below the 50-point mark to 46.9.
“Despite the monthly volatility, we are seeing a clear downward trend in the demand for factory goods…After averaging at a robust level of 60.6 during the first quarter, this index declined to an average of 51.2 in the second quarter. The average for July and August is even lower at 49.6,” Davids pointed out.
Davids indicated that the PMI leading indicator, which remained below one for the fifth consecutive month, corroborated the fairly downbeat outlook. “This indicates that supply continues to exceed demand and this does not bode well for manufacturing sector production,” he said.
“Brent crude oil prices have been trading above $110/b for some time and the Department of Energy has announced that local fuel costs will rise by 93c/l in the beginning of September,” Davids stated.
“The last time the employment index was above the 50 point mark for more than two consecutive months was between February and April 2010. Even more striking is that 2007 was the last time that it measured above 50 for more than three consecutive months,” Davids noted.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Manufacturing News
Updated 3 hours ago Bucking a global trend that has seen a number of pharmaceutical firms withdrawing their manufacturing capabilities from emerging countries, Sanofi South Africa told journalists on Thursday that the group was “serious” about maintaining its production facilities...
AECI’s explosives arm AEL has branched out into Australia as it teams up with undisclosed customers for the supply of explosives into this new market. An AECI office had been established in Brisbane, while preparations were under way to ship a bulk emulsion plant...
Society needs to debate solutions to strikes that last too long, ANC secretary general Gwede Mantashe said on Tuesday. "Such a debate must not be seen as an attack on workers' rights and an affront on the right to strike but rather an important step towards...
Updated 2 hours 18 minutes ago Independent, black-owned and managed investment holding company Southern Palace Properties has acquired an 8% stake in Growthpoint Properties from the Public Investment Corporation’s (PIC’s) Government Employees Pension Fund (GEPF) for R4.5-billion. Standard Bank...
Updated 2 hours 21 minutes ago Shareholders of JSE-listed real estate investment trusts (REITs) Octodec and Premium Properties have approved the proposed merger of the two companies, creating a combined property fund that will attract a market capitalisation in excess of R5-billion and comprise...
Updated 2 hours 29 minutes ago The Metal and Engineering Industries Bargaining Council (MEIBC) this week called on employees and employers to exercise restraint as the metals and engineering industries resumed operations following a four-week strike, stating that it regretted the strike’s...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...