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

Risk Control Manager

  • <500 000 Gauteng Permanent Procurement Consultant Projects / Category Management
R450 000 - R550 000 per annum.Location: Johannesburg ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Procurement Consultant
Salary: R500 000 - R500 000 per annum.Location: ...More

Fuel Logistics Manager

  • <500 000 Logistics & Warehousing Operations, Planning & Inventory Permanent Western Cape
Salary: R600 000 - R720 000 per annumLocation: ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Projects / Category Management Supply Chain
R650 000 - R700 000 per annum.Location: Johannesburg.A ...More

SENIOR BUYER

  • <500 000 Buyer Gauteng Permanent Supply Chain
R500 000 - R550 000 per annum,Location: Midrand,A ...More

Supply Chain Analyst

  • <500 000 Analyst Gauteng Permanent Supply Chain
Salary: R600 000 - R700 000 CTC per ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Supplier / Business Development Supply Chain
Salary: R600 000 - R700 000 per annum,Location: ...More

Demand Planner

  • <500 000 Gauteng Logistics & Warehousing Permanent Projects / Category Management
Salary: R450 000 - R550 000 per annum,Location: ...More

Demand Planner

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
Salary: R500 000 - R500 000 per annum,Location: ...More

Warehouse and Distribution Manager

  • <500 000 Logistics & Warehousing Permanent Procurement Management
Salary: R650 000.00 - R850 000.00 CTC pa,Location: ...More

National Supply Chain Manager

  • <500 000 Gauteng Permanent Procurement Management Supply Chain
Salary: R900 000 - R1 000 000 per ...More

Procurement Specialist

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
Salary: R380 000 - R420 000 per annum,Location: ...More

Supply Chain Analyst Lead

  • <500 000 Analyst Gauteng Permanent Supply Chain
Salary: R1 000 000 - R1 100 000 ...More

CIPS Tutor and Coordinator

  • Gauteng Permanent Projects / Category Management Supply Chain
Commerce Edge South Africa,Division: Commerce Edge Academy,Location: Johannesburg, ...More

Warehouse Manager

  • <500 000 Gauteng Industrial Engineer Logistics & Warehousing Permanent
Salary: R480 000 - R600 000 per annum.Location: ...More

Senior Buyer

  • <500 000 Buyer Gauteng Permanent Procurement Consultant
Salary: R600 000 - R650 000 per annum.Location: ...More

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Salary: R700 000 - R800 000 CTC per ...More

Warehouse Manager

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
R400 000 - R480 000 CTC per annum.Location: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
R400 000 - R500 000 per annum.Location: Cape ...More

Commodity Manager

  • <500 000 Commodities Gauteng Permanent Procurement Consultant
R650 000 - R750 000 per annumLocation: Cape ...More