https://www.engineeringnews.co.za
Africa|Business|Financial|Ports|rail
Africa|Business|Financial|Ports|rail
africa|business|financial|ports|rail

Absa PMI ends 2023 on stronger footing as December business activity rises

8th January 2024

By: Darren Parker

Creamer Media Senior Contributing Editor Online

     

Font size: - +

Financial institution Absa’s Purchasing Managers’ Index (PMI) closed out 2023 on a somewhat stronger footing, rising by 2.7 points to 50.9 index points in December. 

Absa said on January 8 that part of the uptick could be attributed to an encouraging increase in business activity. It was noted that businesses operating through the festive period also benefited from relatively less loadshedding in December.  

Given that new sales orders did not improve further after a solid increase in November, underlying demand for manufactured goods remained relatively weak at year-end.  

“Indeed, time will tell whether the improvement continues into 2024,” Absa said. 

The business activity index rose to 51.4 in December, up from 46 in November, while new sales orders ticked down to 46.3 from 46.6 in November. The employment index also remained below 50 points at 44.8.  

Absa noted concern that the intensifying crisis at South Africa’s ports seems to have contributed to supplier delivery times lengthening even further. It added that the lack of inputs required could hurt production and push up costs going forward.  

“It was somewhat surprising to see respondents turn notably more optimistic about business conditions over the longer term,” Absa said.  

The index tracking expected business conditions in six months’ time rose by 16.9 points to 57.9, which is the best level since the 63.8 index points reached in January last year.  

Absa believes this could reflect some hope that the worst of the local rail and port challenges will be behind us by midyear and that loadshedding could be less intense than last winter.  

More subdued inflation and lower borrowing costs, both domestically and globally, could also help on the cost front and spur demand. Still, the magnitude of the increase is significant, the bank noted.  

Regarding the current level of the PMI, Absa said it should be noted that the index remains below its long-term average, so while purchasing managers are notably more optimistic than through most of last year, they are still not excessively upbeat. 

Finally, Absa pointed out that the purchasing price index remained at a low level in December and ticked up only slightly relative to November, which saw it rise to 62.1 from 61.5. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 
Yale Lifting Solutions
Yale Lifting Solutions

Yale Lifting Solutions is a leading supplier of lifting and material handling equipment in Southern Africa. Yale offers a wide range of quality...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 01 November 2024
Magazine round up | 01 November 2024
1st November 2024

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?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.111 0.189s - 208pq - 2rq
Subscribe Now