While the Absa Purchasing Managers' Index (PMI) still trended below the neutral level of 50 for the sixth consecutive month during November, it has consistently shown improvement for four successive months from August to November.
Steel and Engineering Industries Federation of Southern Africa (Seifsa) chief economist Michael Ade on Friday said the latest preliminary data indicated an improvement in overall business activity in the manufacturing sector.
The PMI improved from 47.8 in October to 48.6 in November – its highest level in six months.
“This is good news for the metals and engineering sector since the index, which is a lead indicator, provides insight into how producers and relevant stakeholders in the manufacturing sector view the month,” he said.
Notwithstanding the volatility of the overall year-to-date PMI data, largely driven by political uncertainty and lack of clear macroeconomic policy stance, Ade said it seemed to be business as usual in the manufacturing sector in general and in the metals and engineering sector, in particular.
“Instead of the usual wait-and-see attitude earlier adopted by the relevant stakeholders that had been holding back production during the first half of the year, there seems to have been an increase in the momentum from the second half of the year going into the festive season,” he explained.