Manufacturing sector struggles to gain momentum as load shedding bites

| 0 Comments

 

Manufacturing.jpgThe purchasing managers index (PMI), which measures activity in SA’s manufacturing sector, improved marginally in March, but remained at levels that suggest output was weak and that SA’s manufacturing sector is struggling to gain momentum.


The index rose to 47.9 in March from 47.6 in February. A below-50 reading suggests manufacturing activity is contracting.


The slight improvement in the headline PMI brought the Q1 2015 average to 49.9 index points – 1.3 points lower than the average for Q4 2014. This suggests that the rebound in actual production growth in Q4 is unlikely to be repeated in Q1, said Abdul Davids, Head of Research at Kagiso Asset Management.


“Electricity load-shedding and general weak demand seem to have nipped the recovery in the bud and will continue to weigh on the [manufacturing] sector going forward,” said Davids.


The index measuring employment levels in the sector improved, but it remained below the 50-point mark at 46.9 points. The average 44.6 point level for Q1 2015 (compared with the average 46.9 points in Q4 2014) confirms that employment conditions remained subdued, noted Davids.


The two largest subcomponents of the PMI, the New Sales Orders and Business Activity indices, edged lower in March, with the New Sales Orders index slipping to 49 points from 49.3. This slower demand for sales orders in turn contributed to the Business Activity index - which has been volatile since October 2014 owed to the uncertainty of the underlying environment as the timing and frequency of load-shedding is unstable - falling to 44.6 index points (from 45.5 previously).

 

AbdulDavids2.jpgAfter signalling a slowdown in cost price pressures for five months in a row, the Price Index reflected a renewed rise in the rate of input cost increases. However, the Q1 average came in at 63.4 index points - below the 69 point average recorded during Q4 2014. Davids noted that the Price Index was likely to move upwards in the months ahead owed to expected increases in petrol and diesel prices.


Despite overall difficult conditions in the sector and a decline in the index measuring expected business conditions in six months’ time to 60.8 points from 64.4 before, purchasing managers still remained relatively optimistic about the future. This was also reflected in the PMI leading indicator, which nudged up slightly.
 

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

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
An opportunity for a seasoned Procurement Manager, who ...More

Industrial Engineer

  • >500 000 Gauteng Industrial Engineer Permanent Procurement Consultant
An exciting opportunity that offers extensive exposure on ...More

Deputy Director: Procurement

  • >500 000 Contract Procurement Management Procurement Officer / Specialist Western Cape
Department of Economic Development and Tourism:Procurement Specialist, Ref ...More

DEMAND PLANNING MANAGER

  • >500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k – R900K) excluding ...More

GLOBAL SUPPLIER PERFORMANCE MANAGER

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Salary: R 1.3M –R1.5M, dependent on level of ...More

GLOBAL CATEGORY MANAGER

  • >500 000 Contract Gauteng Procurement Consultant Projects / Category Management
Total Cost to Company R1mil – R1.2mil excluding ...More

Project Manager

  • >500 000 Contract Procurement Management Projects / Category Management Western Cape
 Description:A well-known retail organization is looking for an ...More

PROCUREMENT ANALYST

  • >500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • Commodities Gauteng Permanent Projects / Category Management
 Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • >500 000 Commodities Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R800K – R900K) Johannesburg Our ...More

ENGINEERING STANDARDS MANAGER

  • <500 000 >500 000 Gauteng Industrial Engineer Permanent Procurement Management
(Total Cost to Company R350K – R550K) JOHANNESBURGYou ...More

Supply Chain Analyst

  • <500 000 >500 000 Permanent Procurement Officer / Specialist Supply Chain Western Cape
(Total Cost to Company R350K – R550K)  SOUTHERN ...More

Security Manager

  • <500 000 >500 000 Gauteng Permanent Projects / Category Management Strategic Sourcing
(Total Cost to Company R350K – R550K) JOHANNESBURG This ...More

Demand Planner

  • <500 000 >500 000 Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R450k – R550k, dependent ...More

Procurement Specialist-Randburg

  • >500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k – R800k including ...More

Solutions Architect

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
(Total Cost to Company R1.3Mil – R1.1Mil including ...More

MANUFACTURING MANAGER - OLIFANTSFONTEIN

  • >500 000 Gauteng Permanent Projects / Category Management
(Total Cost to Company R850k – R950K including ...More