Johannesburg, 1 November 2019 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the rebound in overall business activity in the broader manufacturing sector, as reflected in the ABSA Purchasing Managers’ Index (PMI) data released this morning, Economist Marique Kruger said.
As a lead indicator and the first data point that is published for the preceding month, the PMI sets the tone for how manufacturers and various stakeholders in the broader manufacturing sector view the month ahead.
The headline PMI data released today rebounded from a revised 45.1 points in September 2019 to 48.1 points in October 2018, moving the PMI data closer to the benchmark level of 50 which separates expansion from contraction.
“The rebound in the data is encouraging to businesses in the broader manufacturing sector, including its heterogenous metals and engineering (M&E) cluster of industries. Despite low business and consumer confidence, it seems that manufacturing activity is resilient and is generally improving, albeit at a slow pace,” Ms Kruger said.
She said it is also encouraging to note that the majority of the sub-indices improved in October 2019, when compared to September 2019, with the supplier performance sub-index trending in the expansionary zone.
The worst performing sub-index is the inventories sub-index, which is still trending in the contractionary zone.
In conclusion, Ms Kruger said SEIFSA remains hopeful that the improving trend in the sub-indices would have a positive impact on the composite seasonally-adjusted PMI for November and December 2019, despite stagnant demand.