March PMI rises to 13-month high

| 0 Comments
PMI March growth.jpgThe seasonally adjusted Kagiso PMI put in a strong performance during March, rising to a 13-month high of 57.2 index points, the Kagiso website reports.

The most positive feature of the March numbers is that after rising to just above the key 50 point level in the first two months of 2011, the seasonally adjusted business activity index increased sharply from 51.6 to 59.7 points. The robust rise indicates that March witnessed a ramp-up of manufacturing production, most probably in reaction to previous (sustained in March) indications of improved demand conditions.

On that note, the new sales orders index gained further ground in March and rose to 62 index points from levels between 59 and 60 recorded for the previous two months.

While factory sector output and demand conditions were on a firm footing, the March PMI data also contained some less optimistic trends. Perhaps most disappointing is the employment index which fell back to below the 50 mark to 46.9, indicating that the manufacturing sector shed jobs in March.

Also concerning is the continued upward trend for input costs indicated by the PMI price index, which showed a third consecutive month of strong increase to 88 index points – the highest level since the inflation spike of 2008.
PMI suggests accelerated factory output growth

  • The seasonally adjusted Kagiso PMI put in a strong performance during March, rising to a 13-month high of 57.2 index points. The March gain lifted the average PMI reading for 2011Q1 to 55.5 compared with 51.5 in the fourth quarter of 2010. The improved Q1 quarterly PMI average should be reflected in an acceleration of quarter-on-quarter growth in actual manufacturing production as measured by Stats SA.
  • The most positive feature of the March PMI numbers is that – after rising to just above the key 50 level in the first two months of 2011 – the seasonally adjusted business activity index increased sharply from 51.6 to 59.7 points. The early part of 2010 was the last time that the activity index reached a level close to 60 index points. The robust rise indicates that March witnessed a ramp-up of actual manufacturing production, most probably in reaction to previous (sustained in March) indications of improved demand conditions. On that note, the new sales orders index gained further ground and rose to 62 index points in March from levels between 59 and 60 recorded for the previous two months.
  • While factory sector output and demand conditions were on a firm footing, the March PMI data also contained some less optimistic trends. Perhaps most disappointing is that the employment index fell back to below the 50 mark to 46.9, indicating that the manufacturing sector shed jobs in March. A worrying development is that the index not only declined compared with the February figure, but also came in some way below the January 2011 number of 47.8.
  • Also concerning is the continued upward trend for input costs indicated by the PMI price index, which showed a third consecutive month of strong increase to 88 index points – the highest level since the domestic inflation spike of 2008. The price index declined to 56.4 during October 2010, resulting in an almost 32 point jump in the index during the past five months. This does not bode well for the trend of actual producer prices as measured by Stats SA.

The mixed bag of results reflected in some of the key PMI indices may explain why purchasing managers scaled down their expectations for future business conditions. The expected business conditions index declined for the second month in a row to reach 58.1 points. The index measured 67.1 index points during January.

Download the report

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