2.9 % rise for January PMI

| 0 Comments
PMI July.jpgThe seasonally adjusted Kagiso PMI posted solid gains in January, gaining 2.9 index points to reach 54.6 – the highest level since April 2010. The improved reading provides further evidence that the PMI decline to below 50 in September / October 2010 was largely the outcome of temporary (strike related) factors, reports the Kagiso website.

New sales orders (which at 30% has the biggest weighting in the headline PMI) increased strongly (by 6.4 points) to 59.6, the highest reading since February 2010. The robust gain may be an indication that 1.) The strong growth in domestic consumer spending through 2010Q3 has been sustained and 2.) Foreign demand may be picking up, in line with recent global growth upgrades from institutions such as the IMF. Somewhat concerning was that the business activity index declined by 3.5 points to 51 – if new sales orders are sustained at the current level, the easing in activity levels should be transitory.

Another standout of the January results was the sharp rise in the PMI price index to 71.3 (from 63.1 during December). It was the first time since December 2008 that the index moved above the 70 mark. The current high level of the Brent crude oil price (above $95/bbl) may help to explain the sharp rise.

Factory employment remained a concern with the PMI employment index stuck below the important 50 mark for the ninth consecutive month. Having said that, the positive to take from the number is that it did not decline further, rising by 2.8 index points to 47.8.

PMI posts strong gains in January

* The seasonally adjusted Kagiso PMI started 2011 on a positive note, gaining 2.9 index points to reach 54.6 – the highest level since April 2010. The improved reading provides further evidence that the PMI decline to below 50 in September / October 2010 was largely the result of temporary (strike related) factors.

* A further positive development is that purchasing managers are also more confident regarding future factory business conditions. The expected business conditions index rose by 4.6 index points to 67.1, the highest level since 2010Q1. The higher reading may be indicative of the fact that both the global and SA economic outlook brightened somewhat towards the end of 2010.

* New sales orders (which at 30% has the biggest weighting in the headline PMI) increased strongly by 6.4 points to 59.6, the highest reading since February 2010. The robust gain may be an indication that 1.) The strong growth in domestic consumer spending through 2010Q3 was sustained in the early part of 2011 and 2.) Foreign demand for SA manufactured goods may be picking up, in line with recent global growth upgrades from institutions such as the IMF. A sustained pickup in orders should over time result in a higher reading for the index measuring backlog of sales orders, which declined to 35 from 43.8 during December 2010.

* Whereas improved international growth prospects are good news for SA from an export point of view, it has contributed to the recent sharp rise in a range of commodity prices. The commodity price gains have raised some concern about a build-up of inflationary pressures, particularly in emerging markets. The PMI price index increased sharply to 71.3 (from 63.1) during January. It was the first time since December 2008 that the index moved above the 70 mark. The current high level of the Brent crude oil price (above $95/bbl) may help to explain the sharp rise.

* Somewhat concerning was that the business activity index declined by 3.5 points to 51 – if new sales orders are sustained at the current level, the easing in activity levels should be transitory.

* Factory employment also remained a concern with the PMI employment index stuck below the important 50 mark for the ninth consecutive month. Having said that, the positive to take from the number is that it did not decline further, rising by 2.8 index points to 47.8 in January.

Download the PDF for all the details.

Leave a comment


 

 

Career opportunites

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Job purpose We are looking for a Procurement

Fresh Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Jnr - Mid Level), Supply Chain Planning, Based

Groceries Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Mid Level) Supply Chain Planning, Based at Kenilworth,

Category Implementation Manager

  • >500 000 Gauteng Permanent Projects / Category Management Supply Chain
As an Executive Search and Career Consultant specializing

Head of Procurement

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Regional Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Director

  • >500 000 KwaZulu Natal Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Specialist

  • >500 000 Buyer Gauteng Permanent Procurement Officer / Specialist
As an Executive Search and Career Consultant specializing

Senior Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing Supply Chain
As an Executive Search and Career Consultant specializing

Indirect Sourcing Programme Manager

  • >500 000 Contract Projects / Category Management Strategic Sourcing Western Cape
As an Executive Search and Career Consultant specializing

Deputy Chief Commercial Officer

  • >500 000 Contract Gauteng Procurement Management Supplier / Business Development
As an Executive Search and Career Consultant specializing

GROUP PROCUREMENT MANAGER

  • Gauteng Permanent Procurement Management Supplier / Business Development
Operating out of Johannesburg, this is a key

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is