The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) has bounced back with a 2.4 index point rise to 48.3 in November, reversing October’s 2.6 index point decline to 45.9.

However, factory sector output growth remains under pressure, as indicated by the index staying below the neutral 50-point mark for the fourth consecutive month, as well as the average for the first two months of the fourth quarter registering 1.8 points below that of the third quarter.

The PMI suggested that output was likely to remain subdued after a 1.3% quarter-on-quarter contraction in manufacturing production in the third quarter.

“While the headline PMI index has struggled to climb back above its neutral level of 50 since July, the uptick in the PMI leading indicator to its highest level since 2006 is encouraging and, if sustained, could bode in favour of improved domestic manufacturing prospects in 2017,” said BNP Paribas Securities South Africa economist Jeffrey Schultz.

Encouraging improvement was seen in two key subcomponents of the headline PMI in November, namely the new sales orders index, which rose by 6.9 index points to 51.4, and the business activity subindex, which climbed to 48.9 points in November from 43.5 in October.

However, despite the improvement, November marked the fifth consecutive month below the 50-point mark for the business activity index.

Manufacturer inventory levels slipped two points to 45.2 in November, while the PMI employment index remained broadly flat at an “uninspiring” 45 index points, said Schultz.

“On a positive note, this means that the new sales orders index outstripped the inventories index, resulting in the PMI leading indicator edging above one – this usually bodes well for production going forward,” the PMI noted.

The PMI price index also increased, for the first time in four months, to 65.6 points in November, while the expected business conditions index rose 3.3 points in the month under review following a 13.2-point plunge in October.