Manufacturing outlook down as PMI slumps

| 0 Comments

 

PMI_down.jpgThe seasonally adjusted ABSA Purchasing Managers’ Index (PMI) slumped in April 2017, after a solid performance during Q1 2017. The index fell to 44.7 index points from an average of 51.9 during Q1.

The decline was relatively broad based, with key PMI subcomponents that measure business activity and inventories slumping to multi-year lows. While the deterioration is worrying, the magnitude of the drop may not be reflected fully in official data as actual growth was already weaker in January and February than signalled by their higher PMI readings.

Nonetheless, the survey suggests that the sector experienced a rough start to Q2 2017.

The new sales orders index declined sharply in April, pulling along business activity. The 8.3-point fall in orders was likely driven by (the expectation of) weaker demand from local customers, as respondents still noted an improvement in export orders.

The inventories index also moved lower in April, dropping to the lowest level since 2009. The declines in these three indices were so steep, that the fact that the two other PMI sub-indices (accounting for a combined weighting of 35% of the headline) remained above 50 points could not prevent the headline figure from slipping sharply lower.

The index tracking employment stayed more or less unchanged at 50.3 points, while suppliers’ performance rose by 2 points to 53.

This was the first full survey after the recent cabinet reshuffle and subsequent sovereign credit rating downgrades. It is likely that respondents now anticipate economic growth and domestic demand to be weaker than before. As such, they have likely scaled back their expectations for orders and activity growth going forward. This is reflected in the decline of the index measuring expected business conditions in six months’ time, which fell to 55.8 points in April from 68 in March. It is also possible that the soured sentiment is reflected in the responses to questions pertaining to activity and demand, thereby resulting in a bigger downturn.

The purchasing price index increased in April after moving lower in February and March. This was driven by the weaker rand exchange rate and higher Brent crude oil prices (on average) during the month. With another fuel price increase effective from the beginning of May, costs could continue to move higher.

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

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

National Supply Chain Manager

  • <500 000 Across borders Permanent Procurement Management Supply Chain
R750 000 - R1 000 000 per annum,Location: ...More

Industrial Engineer

  • <500 000 >500 000 Industrial Engineer Operations, Planning & Inventory Permanent Western Cape
R450 000- R500 000 CTC per annum,Location: Western ...More

Commodity Manager

  • <500 000 Commodities Gauteng Permanent Procurement Management
Category: Procurement,Salary: R700 000 - R800 000 per ...More

Supply Chain Manager

  • <500 000 Gauteng Permanent Procurement Management Supply Chain
Category: Consulting,Salary: R750 000 - R800 000 CTC ...More

Logistics Manager

  • <500 000 Across borders Logistics & Warehousing Permanent Procurement Management
Category: Logistics,Salary: R900 000 - R1 000 000 ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Area of Specialisation: Planning,Salary: R500 000 - R650 ...More

Industrial Engineer

  • <500 000 Analyst Gauteng Industrial Engineer Permanent
R800 000 - R850 000 CTC per annum.Location: ...More

Security Manager

  • <500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
(Total Cost to Company R350K - R550K).This is ...More

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R650k - R750k) excluding

Commodity Manager Raw Materials

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
(Total Cost to Company R980k - R800k) excluding ...More

Commodity Manager Logistics

  • <500 000 Commodities Gauteng Logistics & Warehousing Permanent
(Total Cost to Company R1mil - R900k).Industry: Engineering

Procurement Consultant

  • <500 000 Gauteng Permanent Procurement Consultant Procurement Management
(Total Cost To Company 550K - 450K) includes ...More