Q4 manufacturing perceptions mixed, 2015/16 outlook bleak
Subdued demand, sluggish construction and mining activity, a volatile rand exchange rate, regulatory hurdles and the effects of third-quarter 2014 strike action had impacted negatively on the local manufacturing sector during the fourth quarter of 2014.
This is according to policy development and dialogue organisation Trade and Industrial Policy Strategies (Tips) economist Baba-Tamana Gqubule who on Tuesday reflected on the findings of recent economic surveys.
Although most respondents to the Manufacturing Circle’s Manufacturing Bulletin for the fourth quarter of 2014 had indicated that business conditions were weak or poor, some improvement was seen in sales.
Gqubule attributed the sales resurgence to several factors including the normalisation of industry following the industrial unrest in the third quarter of the year, increased market coverage, seasonal impulses and extensive promotional campaigns by companies during the quarter.
Gqubule further pointed out that, according to a recent survey by Rand Merchant and the Bureau for Economic Research, business confidence had improved in the fourth quarter of 2014, reaching 51 points, up from 46 points in the previous quarter.
“The survey showed that manufacturing confidence [had] rebounded from 28 to 42 index points between [the third and fourth quarters of] 2014. This outcome was achieved on the back of recovering local and export sales volumes, as well as moderating cost escalations,” she explained.
The Kagiso Purchasing Managers’ Index (PMI), meanwhile, rose to 51.2 points in the fourth quarter of 2014, up from 47.9 points in the preceding quarter.
“A reading above 50 points indicates an increase in the tempo of activity within the sector. In the same perspective, the new sales orders subindex moved into expansion territory, rising from 47.5 points to 52.6 points between [the third and fourth quarter], which is a sign of a recovery in the demand for manufactured goods,” Gqubule said.
She added that, although the employment subindex had edged higher, it remained below the neutral 50-point level.
“This suggests that the manufacturing employment outcome remained muted during the quarter,” Gqubule explained.
She highlighted that “increasingly more” companies were expecting weak or poor business conditions to prevail in the local manufacturing sector over the coming months, which did not augur well for the sector’s revival.
Comments
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation