PMI - Manufacturing gaining traction as conditions normalise



PMIAugust2012.jpgActivity in the manufacturing sector picked up momentum in November as business activity and new sales orders have risen ahead of the festive period.

The SA purchasing managers index (PMI), which gauges activity in manufacturing, rose to 53.3 in November from 50.1 in October.

A PMI reading above 50 suggests expansion in activity. The level of 53.3 in November is the best since August 2013 and the fourth consecutive monthly improvement.

However, the improvement in the PMI was owed to a return to normal activity following strikes, warned Abdul Davids, head of research at Kagiso Asset Management (who compiles the index).

“The improvement in the new sales orders and business activity indices was expected given that domestic demand (mainly from the mining sector) is recovering from disruptive strikes earlier in the year which, in turn, boosts output growth. Therefore, this should be seen as a normalisation in the manufacturing sector, and not necessarily as a significant outperformance.”

The 4.8-index point rise in the new sales orders index (to 55) was supported by a continued normalisation of domestic mining demand conditions.

However, while domestic demand is improving, the global environment deteriorated over recent months, creating renewed headwinds for local manufacturers targeting the export market.

The Eurozone manufacturing PMI remains barely above the neutral 50-point mark and the Chinese preliminary figure for November came in at 50, the weakest level in six months.

Other economic indicators suggest that these two economies, important trading partners for South Africa, may continue to struggle in the near term.

While the US is still outperforming the rest of the world, the country’s preliminary manufacturing PMI declined for a third consecutive month to 54.7 from 55.9 index points in October.

In line with improving local demand, the business activity index rose substantially from 50.3 to 56 index points, reaching its highest level since February 2012.


AbdulDavids2.jpg“Manufacturers appear to have been caught off guard by the rise in demand, as evidenced by the sharp increase in the backlog of sales orders index,” said Davids, further cautioning that the current bout of electricity supply disruptions could hamper output in December.

The price index fell sharply from 76 to 67.8 index points. This moderation was mainly driven by significantly lower international oil prices, resulting in lower local petrol and diesel prices and have countering the upward price pressures stemming from the weak rand/dollar exchange rate, said Davids.

A further petrol and diesel price cut is on the cards for December and, at this stage, international oil prices are expected to remain relatively low, which bodes well for the cost price profile going forward, he pointed out.

Read the full report here

Leave a comment

SmartProcurement Newsletter

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:
* Country:
* Public / Private:



Career opportunites

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

Commodity Manager MRO &CAPEX

  • <500 000 Commodities Gauteng Permanent Projects / Category Management
(Total Cost To Company 900k - 750k) includes ...More