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


 

 

Career opportunites

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management
Job purpose We are looking for a Procurement

Fresh Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Jnr - Mid Level), Supply Chain Planning, Based

Groceries Demand Planner/Supply Chain Analyst

  • Analyst Operations, Planning & Inventory Permanent Supply Chain Western Cape
(Mid Level) Supply Chain Planning, Based at Kenilworth,

Category Implementation Manager

  • >500 000 Gauteng Permanent Projects / Category Management Supply Chain
As an Executive Search and Career Consultant specializing

Head of Procurement

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Regional Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Director

  • >500 000 KwaZulu Natal Permanent Procurement Management Strategic Sourcing
As an Executive Search and Career Consultant specializing

Procurement Specialist

  • >500 000 Buyer Gauteng Permanent Procurement Officer / Specialist
As an Executive Search and Career Consultant specializing

Senior Sourcing Manager

  • >500 000 Gauteng Permanent Procurement Management Strategic Sourcing Supply Chain
As an Executive Search and Career Consultant specializing

Indirect Sourcing Programme Manager

  • >500 000 Contract Projects / Category Management Strategic Sourcing Western Cape
As an Executive Search and Career Consultant specializing

Deputy Chief Commercial Officer

  • >500 000 Contract Gauteng Procurement Management Supplier / Business Development
As an Executive Search and Career Consultant specializing

GROUP PROCUREMENT MANAGER

  • Gauteng Permanent Procurement Management Supplier / Business Development
Operating out of Johannesburg, this is a key

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is