Deterioration in broader manufacturing purchasing managers’ index is disappointing

2nd October 2019 By: Creamer Media Reporter

The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) finds the deterioration in overall business activity in the broader manufacturing sector – as reflected in the ABSA Purchasing Managers’ Index (PMI) released today - disappointing.

The headline PMI dipped from 45.7 points in August 2019 to 41.6 points in September 2019, moving further from the benchmark level of 50, which separates expansion from contraction.

SEIFSA Economist Marique Kruger said the deterioration in the data is disappointing, and reveals that manufacturers are still struggling, amid low business and consumer confidence.

“Worryingly, the trend in the majority of the sub-indices deteriorated in September 2019 when compared to August 2019, with the business activity sub-index (39.3 points) and the inventories sub-indices (39.6 points) performing the worst. However, the best performing sub-index was the supplier performance sub-index, rising from 48.7 points in August 2019 to 51.4 points in September 2019,” Ms Kruger said.

She said notwithstanding the decline, SEIFSA remains hopeful that the performance of the sub-indices would recover and eventually improve the composite seasonally-adjusted PMI for October 2019.