July PMI reaches 51.5 − manufacturing "off to a good start" in Q3

| 0 Comments

PMI.jpgThe seasonally-adjusted Absa Purchasing Managers' Index (PMI) rose to 51.5 index points in July, up from 47.9 in June. The current level is comfortably above the neutral 50-point mark and is supported by four out of five key sub-components being in positive terrain.

"This suggests that the manufacturing sector got off to a good start in the first month of Q3 of 2018", said the Bureau for Economic Research, who conducts the survey.

The recovery was driven by an improvement in demand, as reflected by an increase in the New Sales Orders Index, which rose to 52.8 index points in July. This is slightly above the average recorded in Q2 of 2018 and reverses June's losses.

Albeit relatively volatile, the New Sales Orders Index has so far performed significantly better in 2018 when compared with the second half of 2017.

The uptick in demand filtered through to higher business activity (increased by 4.5 points to 50.3), which pushed the Output Index above 50 points for the first time since February. This, in turn, contributed to the 4.8-point increase in the Employment Index (now at its highest level since early 2016).

However, despite the Inventories Index rising to 48.5 points in July, it remained below the neutral 50-point mark - a level it has held for 16 consecutive months.

While current conditions seem to have improved, purchasing managers have turned very pessimistic about expected conditions going forward (compared with historic levels). The index tracking Expected Business Conditions in six months' time declined to 48.7 points in July from 55.7 in June. This is the first time since August 2017 that manufacturers expect conditions to deteriorate going forward instead of improving.

This is partly because current conditions are (according to the PMI survey) better than they have been in recent months, so an improvement from this elevated level may be less likely than from previous tougher conditions. Furthermore, prospects for exporters may be more subdued, owing to concerns about the potential negative impact on global growth from the wave of US trade protectionism.

Manufacturers are also battling with increasing cost pressures. The Purchasing Price Index rose sharply for a second consecutive month. At 83.6 points, it is almost 20 points above May's reading of 65.5 points and is at its highest level since early 2016. A key driver of the recent upward trend has been several straight months of hefty fuel-price increases. Fortunately, the fuel price remained virtually unchanged at the beginning of August. On average, the Brent crude oil price and Rand exchange rate stayed broadly the same compared with the previous month.

The Purchasing Commitments Index edged marginally lower to 44.6 index points in July after remaining unchanged at 45 points in June.

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

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

Logistics Manager

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
Salary: R 800 000 - R 900 000 ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Salary: R 600 000 - R 650 000 ...More

Supply Chain Analyst

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

Commodity Manager

  • <500 000 Commodities Gauteng Permanent Procurement Management
R850 000 - R1 000 000 per annumLocation: ...More

Commodity Manager

  • <500 000 Commodities Permanent Procurement Management Western Cape
R700 000 - R850 000 per annum,Location: Western ...More