January PMI may overstate improvement in the manufacturing sector

| 0 Comments

 

AndreCoetzee.jpgA smaller-than-usual decline in the non-seasonally adjusted January PMI resulted in the seasonally adjusted PMI increasing significantly and perhaps overstating the improvement in actual manufacturing output in January, said Andre Coetzee, MD of CIPS Africa.


Manufacturing may be starting the year on good footing, but underlying conditions are unlikely to be as rosy as suggested by the seasonally adjusted figure.


It is not unusual for the adjusted and unadjusted figures to move in divergent directions and the divergence tends to be particularly large in January as the seasonal factor is typically low, said Coetzee.


“The unadjusted PMI is inclined to fall in January, but this January’s drop was smaller than usual. As a result, the seasonally adjusted figure increased significantly and may overstate the improvement in business conditions in the factory sector in January,” he said.


The seasonally adjusted PMI increased by 4 index points to 54.2, while the non-seasonally adjusted PMI figure declined to 48.2 index points.


Statistics SA figures released on Tuesday showed that manufacturing production rose by 1.1% in December 2014 compared with a year earlier.


The increase in output was mainly owed to higher production in the food and beverages division.


Stats SA also reported that seasonally adjusted manufacturing production increased by 2.5% in Q4 2014 compared with Q3 2014.


The main contributors to the 2.5% increase were the petroleum, chemical products, rubber and plastic products division and the basic iron and steel, nonferrous metal products, metal products and machinery division.


Manufacturing data were in line with the findings of the seasonally adjusted PMI.


The rise in the seasonally adjusted PMI figure was almost fully driven by a jump in the seasonally adjusted business activity index, which rose to 61.7 in January from an average of 51.6 in the fourth quarter. This points towards an acceleration in output in January compared to December.


The decline in the unadjusted figure was smaller than usual, amplified by the low seasonal factor and explains the large jump in the seasonally adjusted index. The non-seasonally adjusted figure fell from 49.3 to 48.8 index points, which was still significantly higher than the 38.8 recorded in January 2014.


A 1.1 index point rise in the new sales orders index to 53.7, as well as an increase in the inventories index to 61.2 further supported the uptick in the PMI, albeit to a lesser extent than business activity. On the other hand, the employment index continued to weigh on the headline index and dipped to 43.8 in January from 46.3 in December.


Sharply lower international oil prices and domestic fuel prices resulted in a fourth consecutive decline in the price index to 61.9. The continued moderation in the rate of input cost increases, as well as the expectation that oil prices will remain low for coming months, likely underscores why purchasing managers are optimistic about the near future, concluded Coetzee.


The index measuring expected business conditions in six months’ time rose to 66.9.


Read the full PMI 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

Demand Planning Manager

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

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
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

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

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

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

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