The seasonally adjusted business activity index, which posted a robust gain of 6.1 index points during November, remained largely unchanged at 54.5 in December. The unadjusted index for business activity declined to 57.4 from 62.8, reflecting the seasonal impact of a slowdown in factory activity over the festive season.

New sales orders declined by 3.3 points, but remained in positive territory at 53.2. The moderation followed a 5 index point gain in November.

The more negative news concerned the employment prospects for the factory sector. The PMI employment index remained stuck below the critical 50 index point level for the eighth consecutive month with the index falling by 2.6 points to 45.

Purchasing managers remained fairly upbeat regarding future business prospects – the index for expected business conditions remained above the 60 mark, although it lost some ground from 64.6 during November to 62.5 in December. The somewhat more circumspect outlook was justified by the PMI leading indicator (new sales orders minus inventories), which moved back into negative territory to -3.

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The survey is conducted on a monthly basis by the Bureau for Economic Research at the University of Stellenbosch in conjunction with The Chartered Institute of Purchasing & Supply (CIPS).