The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) improved to 54.9 in April, its highest level since August 2013.

This was compared with the 50.5 points registered in March and much higher than market consensus of 50.2.

Barclays noted in a statement issued on Tuesday that all five of the PMI’s major subcomponents were above the neutral 50-point level in April, suggesting a “change of fortune”.

“The sustained improvement and the broad-based nature of the uptick, with four out of the five major subcomponents improving, are encouraging signs that the sector may have reached a bottom and could continue to trend upwards in coming months,” it noted.

The new sales orders index rose for a third consecutive month in April, while the business activity index had increased above the neutral 50-point mark after signalling a slowdown for eight months.

BNP Paribas Securities South Africa economist Jeffrey Schultz agreed that the improvement in the PMI in April pointed to some stability in the manufacturing industry, which had been impacted by industrial action, low commodity prices, a weak demand environment and a sharp rise in input costs in recent years.

"Indeed, last week’s better-than-expected export figures for March indicate that perhaps the industry is also starting to slowly benefit from the competitiveness gains resulting from a still weaker, but now slightly more stable, currency," he added.

He warned, however, that some caution remained about the outlook for the sector, owing to possible further industrial action in the automotive and steel and engineering sectors towards the end of the second quarter of the year, along with weak global and domestic growth and evidence from Transnet Freight Rail, roads and ports data, which continued to show underlying stagnation in the embattled supply-side of the economy.

Investec economist Kamilla Kaplan also noted that the upward trend in the PMI might be temporary, as the manufacturing sector continued to face significant headwinds.

Barclays stated that the magnitude of the recent uptick in the PMI would not necessarily be reflected to the same extent in actual production growth.

“Many of the PMI indicators come from almost recession-low levels during late 2015, which were even sustained at the start of 2016, and this amplifies the size of the relative increases somewhat,” it added.

Meanwhile, purchasing managers were also more upbeat about expected business conditions in six months’ time than they were at the start of the year, with the index up by 4.8 points to 55.9 in April – 16.5 points higher than in January.