The seasonally-adjusted overall PMI improved by 8%, mainly on the back of the business activity sub-index rising by nearly 28% in January. Speaking after the release of the figures, SEIFSA Chief Economist Henk Langenhoven said that the difficulty in interpreting the trends as a guide to future activity was very high.
“When the 12-month movements in both the seasonal adjusted indices is considered, the PMI still declined by 3,6% and the activity index by 5,2%. The leading indicator, which is a ratio between new sales orders and inventories, has declined below 1, which indicates that future activity will be lower,” Mr Langenhoven said.
However, he added that the latest numbers improved further the business activity sub- index level, as well as its rate of change. These indicators had bottomed in the middle of 2014. The January numbers, therefore, eased some of the doubts about prospects for the future.
Mr Langenhoven said that within the context of slowing domestic economic growth, uncertainty about world economic recovery and demand for products of the metals and engineering sector, the electricity constraints and uncertainty created by these factors, SEIFSA would be cautious of the latest seemingly very positive turn of the PMI.