Day: February 28, 2018

Johannesburg, 1 March 2018 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the continued improvement in overall business activity in the manufacturing sector as reflected in the ABSA Purchasing Managers’ Index, SEIFSA Economist Marique Kruger said.

The data showed that the PMI improved from 49.9 percent in January 2018 to 50.8 percent in February 2018. This is the first time since May 2017 that the indicator trended above the neutral level of 50, which is very encouraging for companies in the metals and engineering (M&E) 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,” Ms Kruger said.

In terms of the various sub-indices, the strongest performer was the new sales orders sub-index registering 52.7 percent in February 2018, from 50.4 in January 2018, while the weakest performer was the inventories sub-index registering 44.9 percent in February 2018, from 47.3 percent in January 2018.

Ms Kruger said the Federation’s expectation is that next month’s data for the composite PMI indicator could improve further, provided that business confidence continues its positive trajectory.

Ms Kruger said SEIFSA was also hopeful that businesses in the M&E sector would take advantage of the general buoyancy, improving business prospects and positive expectations to increase production.

Issued by:
Ollie Madlala
Communications Consultant
Tel: (011) 298 9411 / 082 602 1725
Email: ollie@seifsa.co.za
Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.

Johannesburg, 28 February 2018 – The latest release on the Producer Price Index (PPI) for intermediate manufactured goods published by Statistics South Africa (Stats SA) today reflects a further deterioration in selling price inflation in the metals and engineering (M&E) sector, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

The Stats SA data showed that the PPI for intermediate manufactured goods decreased to 1.5 percent year on year in January 2018, from the 3.2 percent recorded in December 2017.

“This a poor performance, especially given the four consecutive months of PPI increases for intermediate manufactured goods prior to December 2017,” SEIFSA Economist Marique Kruger said.

Also, given the volatility of input costs in the sector, the deceleration in the PPI data leaves manufacturers with little leeway to pass cost increases on to the market. Correspondingly, SEIFSA’s composite input cost index, which tracks the average cost structure for the M&E sector, was recorded at 1.4 percent in January 2018, up from 3.4 percent in December 2017.

Ms Kruger said it is important to maintain a positive differential in the selling price inflation and input cost inflation in order for the sector to stay attractive for existing and new investments.

“Hopefully, the PPI for intermediate manufactured goods will rebound against the backdrop of a continued improvement in business confidence, especially in light of recent developments in South Africa’s political landscape,” Ms Kruger said.

Issued by:

Ollie Madlala

Communications Consultant

Tel: (011) 298 9411 / 082 602 1725

Email: ollie@seifsa.co.za

Web: www.seifsa.co.za

SEIFSA is a National Federation representing 23 independent employers. Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing few than 50 people.