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August PMI decline larger than anticipated

PMIdown_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined to 45.7 index points in August 2019, down from 52.1 in July 2019.

While the magnitude of the decline may have been larger than anticipated, a fall in the PMI in August was not unexpected. This followed on July's surprisingly solid reading despite the weak domestic demand environment and growing concerns about the health of the global economy.

All of the PMI's major sub-components came in below the neutral 50-point mark, signalling general weakness in the sector.

The power of procurement: an Australian perspective

JeniChristensen_100.jpgBy Jeni Christensen (MCIPS), Procurement Manager in Melbourne, Australia, for Villa Maria Catholic Homes, a not-for-profit organisation linked to the Catholic Church.

2019 has been a productive year for procurement with the Commonwealth Modern Slavery Act of 2018 (the Act) being passed by the Australian Parliament on 29 November 2018 and entered into force on 01 January 2019. The Act established a national modern slavery reporting requirement for large businesses (> AU$100-million in revenue) and other entities doing business in the Australian market over the same threshold.

There is some great work being done but there is still a huge amount to do to eradicate modern slavery within Australia and, indeed, globally. The key is to educate ourselves, our suppliers, staff and business contacts on what this means, why this is important, how they can help and what we are looking for.

The unenviable task of the Chief Restructuring Officer (CRO)

CRO_125.jpgBy Matodzi Ratshimbilani

President Cyril Ramaphosa and the Minister of Finance have, on several occasions in the recent past, informed South Africa that mega state-owned enterprises (SOEs) will soon be under the helm of chief restructuring officers (CROs), of whom a lot is expected to turn around the fortunes of beleaguered SOEs.

On 30 July 2019, the appointment of Freeman Nomvalo as CRO of Eskom was announced. However, previous announcements were scant on the details around the role of CROs at SOEs. The nomenclature of CROs seem to be borrowed from the United States where the practice was abound after the 2008 financial crisis.

Join us at Smart Procurement World in September, where we will look at what procurement functions can do to build more confidence in SOEs and how procurement should be positioned to protect and strengthen SA's core institutions.

PMI and its sub-components improved in July but sustainability is in question

GlobalManufacturingConcern_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) measured 52.1 index points in July 2019, up from 46.2 index points in June 2019. This is the first reading above the neutral 50-point mark since December 2018.

"The improvement is well-supported by the underlying sub-components, with four of the major five sub-components coming in above the neutral 50-point mark, signalling an expansion in activity", said the Bureau for Economic Research (BER).

"However, given growing concerns about the health of the global manufacturing sector, it remains to be seen whether this improvement can be sustained going forward", noted BER.

June PMI up, but weak demand limits recovery potential

Headwind_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) rose to 46.2 index points in June 2019, up from 45.4 in May 2019. "The average level for Quarter 2 of 2019 was 46.3 points, below the level recorded in Quarter 1 of 2019", said the Bureau for Economic Research (BER) in a statement.

In contrast, available official statistics suggest that quarterly manufacturing output is set to rebound strongly in Quarter 2 after a dismal first quarter. "However, part of this rebound is driven by a normalisation in output after load shedding disrupted production earlier in the year", explained BER.

PMI paints poor picture for manufacturing activity recovery

manufacturing_trouble_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) erased most of last month's gains as it fell to 45.4 index points in May 2019, down from 47.2 index points in April 2019. Barring a drop to 45 index points in March 2019, this is the weakest level since October 2018. The decline brought the average PMI for the first two months of Quarter 2 of 2019 to 46.3 points, below the Quarter 1 of 2019 average of 47.1 points.

"This, unfortunately, does not bode well for a recovery in activity in the manufacturing sector after output declined notably on a quarter-on-quarter basis in Quarter 1", said the Bureau for Economic Research (BER).

PMI indicates manufacturing stabilised in April, but at a depressed level

Headwind_100.jpgThe seasonally-adjusted Purchasing Managers' Index (PMI) rose by 2.2 points to reach 47.2 index points in April. This was the first increase after three months of decline.

Remaining below the neutral 50-point mark, the PMI is more or less in line with the average recorded in Quarter 1 of 2019. "This means that factory conditions stabilised at a fairly depressed level at the start of Quarter 2", said the Bureau for Economic Research (BER) in a statement.

March PMI continues downward trend

PMI.jpgThe seasonally-adjusted Purchasing Managers' Index (PMI) continued downwards to 45 points exactly in March 2019, from 46.2 in February. This was the third consecutive month of decline.

As was the case in February, two of the PMI's major sub-components came in above the 50-point mark, while three were stuck in negative terrain. "However, all but one of the main sub-indices declined compared with February", noted the Bureau for Economic Research (BER).

Is procurement more art than science?

PeterSmith_100.jpgAs we move towards a new decade, is the emphasis in the procurement world changing? Are we going to see a new age where the 'Art of Procurement' comes to the fore? Peter Smith, Chief Officer of Procurement Excellence and European Director, Public Spend Forum, deliberates the topic.

Planning procurement's response to the Millennial Generation

ChrisSawchuk_100.jpgThe Millennial Generation represents one of the greatest potential influences and challenges to managing talent in the next year or two.

Hackett's 2016 Procurement Key Issues study revealed that talent management remains one of the top-three critical or major areas of focus for virtually all procurement organisations. The two perennial favourites, category management and strategic sourcing, make up the other top focus areas.

Combined with the fact that most procurement organisations (especially those in Europe) continue to experience higher levels of staff churn and difficulty attracting great talent, organisations are targeting three specific areas to transform talent. They are:
1. Improving leadership skills
2. Honing business acumen
3. Building specialist procurement skills

"But can procurement cope with, and ultimately benefit from, the disruption brought into talent management by the Millennial Generation?", asks Chris Sawchuk, Principal and Global Procurement Advisory Practice Leader, The Hackett Group.

February 2019 PMI down

Manufacturing_PMI_100.jpgThe seasonally-adjusted Purchasing Managers' Index (PMI) declined to 46.2 index points in February 2019, down from 49.9 in January. "Despite the decline, the average recorded during the first two months of Quarter 1 of 2019 is slightly above the average seen in Quarter 4 of 2018", noted the Bureau for Economic Research (BER) in its February report.

Blockchain will not save the world (at least not this year...)

Bertrand_Malteverne.jpgBlockchain hype has spread like wildfire... "But it's time for a reality check", says Bertrand Maltaverne, Solutions Consultant, who helps organisations to digitally transform their procurement practices.

January PMI points to solid start to 2019

PMI_strong_start_200.jpgThe seasonally-adjusted Purchasing Managers' Index (PMI) edged lower to 49.9 index points in January 2019, down from 50.7 in December 2018.

Despite the decline, the index remains 2 points above the average recorded in 2018, which suggests that manufacturing started the year on fairly solid footing.

The performance of the PMI's sub-components was more mixed, with many of the sub-indices declining compared with their December levels.

Procurement predictions for 2019

LucyPatchett_100.jpgSupply Management's Lucy Patchett takes a look at some of the key trends for 2019...

PMI ends 2018 with its best performance

manu_PMI_100.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) ended 2018 on a positive note, reaching its best level of the year. The PMI rose from 49.5 in November to 50.7 in December, which is just above the neutral 50-point mark and signals growth in the sector.

The headline PMI was well supported by three of the five sub-components: activity, demand and supplier performance. However, employment moved lower, while the Inventories Index edged back below the neutral 50-point mark, noted the Bureau for Economic Research (BER) in its January report.

November PMI shakes off 3-straight-month decline

PMI_growth.jpgThe seasonally adjusted Absa Purchasing Managers' Index (PMI) rose to 49.5 index points in November from 42.4 in October.

This was the PMI's first increase after three straight months of declines and brought the index to the best level since July 2018.

The improvement was broad-based with four out of the five main subcomponents rising compared with October.


 

 

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