August PMI improves from July slump

| 0 Comments

 

ManufacturingProduction.jpgThe seasonally adjusted Absa Purchasing Managers’ Index (PMI) improved to 44 index points in August, after slumping to its lowest level since 2009 in July (42.9 points). The improvement was broad based, with four of the five major subcomponents increasing in August. However, despite ticking higher, the key sub-indices remained below the neutral 50-point mark. This suggests that the manufacturing sector is still under significant pressure and does not bode well for manufacturing output (and overall GDP) in Q3 2017.

After two months of steep declines, the business activity index edged up to 41.3 index points from 39.3 in July. However, at 41.3 points, the index is still 11 points below the level reached in May.

The new sales orders index also managed to improve, up by just by 0.3 points. However, at just 40.1 index points, the index remains indicative of very subdued demand conditions. In fact, even with the marginal improvement, the index is at a level last seen in 2009.

Furthermore, respondents turned notably more pessimistic about business conditions going forward. The index measuring expected business conditions in six months’ time declined from 51.3 to 46.6 points in August. This is the first time since February 2016 that this index slumped below the neutral 50-point mark, which signals that purchasing managers expect business conditions to worsen further through the second half of 2017.

Some of the respondents who completed the survey earlier in the month may have been concerned about the possibility of a protracted strike in the steel and engineering sector crippling output. Therefore, now that a wage agreement was reached in late August, which removes the possibility of a strike, sentiment may turn slightly more positive. Nonetheless, if the weak demand and production environment persists, a sustained improvement remains unlikely.

The inventories index rose slightly to 46.5 points in August. This was the fifth straight month that the index failed to edge above 50 points. However, with the inventories index still being well above the new sales orders index, the PMI leading indicator stayed stuck below 1 point, which does not bode well for output growth going forward.

Another factor that may have soured purchasing managers’ expectations about the trading environment going forward is renewed cost pressure. After remaining unchanged at 61.3 points in July, the purchasing price index rose to 67.2 in August.

With September’s hefty fuel price hike, costs could tick up further in the coming months.

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Marketing Executive

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Geographical Area: Midrand GautengSalary: Market related2 Years Marketing ...More

Head: Supply Chain Management (P6)

  • <500 000 >500 000 Limpopo Permanent Procurement Management Supply Chain
North east of the Tropic of Capricorn, just ...More

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More