The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has welcomed the continued improvement in overall business activity in the manufacturing sector, as reflected in the Absa Purchasing Managers Index (PMI) for February.
Seifsa economist Marique Kruger explained that the data showed that the PMI improved from 49.9 in January to 50.8 in February.
This, she noted, was the first time since May 2017 that the indicator trended above the neutral level of 50, which was very encouraging for companies in the metals and engineering sector.
“The PMI is an important lead indicator that sets the tone for how producers and relevant stakeholders in the manufacturing sector view the month ahead. “The performance of the index can partly be attributed to improved business confidence in light of the growing optimism and business confidence following recent political developments in the country,” Kruger explained.
In terms of the various subindices, the strongest performer was the new sales orders subindex, which registered 52.7 in February, compared with 50.4 in January, while the weakest performer was the inventories subindex, which registered 44.9 in February, from 47.3 in January.
Kruger further said the federation expected next month’s data for the composite PMI indicator to improve further, provided that business confidence continued its positive trajectory.
In addition, she said Seifsa, which has a combined membership of 1 600 companies, was also hopeful that businesses in the metals and engineering sector would take advantage of the general buoyancy, improving business prospects and positive expectations to increase production.