Johannesburg, 3 February 2020 – The dip in overall business activity in the broader
manufacturing sector for January 2020 is discouraging, the Steel and Engineering
Industries Federation of Southern Africa (SEIFSA) said this afternoon.
Speaking after the release of the Absa Purchasing Managers’ Index (PMI), SEIFSA
Economist Marique Kruger said the decrease in the data is discouraging for companies
in the broader manufacturing sector, including its diverse metals and engineering (M&E)
cluster, especially given the prevailing stagnant levels of domestic demand.
The data released this morning indicates a dip in sentiments for broader manufacturing
activity in the country, registering a decrease against the backdrop of a poor
performance in December 2019. The preliminary seasonally-adjusted data showed that
the headline PMI dipped to 45.2 in January 2020 from 47.1 points in December 2019,
with the data moving further away from the benchmark level of 50, which separates
expansion from contraction.
“It is also disheartening to note that nearly all five of the seasonally-adjusted
sub-components correspondingly registered decreases in January 2020 when
compared to the previous month, with four out of the five sub-indices trending below the
neutral level,” Ms Kruger said.
Moreover, she said the strongest performer was the business activity sub-index
registering 44.6 points in January 2020, from 36.6 points in December 2019, while the
weakest performer was the employment sub-index registering 37.8 points.
“The dip in the headline PMI data is disappointing and modifies expectations for
companies in the M&E cluster going into the month of February, especially given that
the majority of sub-indices deteriorated in January 2020 relative to December 2019,” Ms
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