PMI declines as manufacturing recovery suffers major setback



Strike.jpgThe seasonally adjusted Kagiso Purchasing Managers’ Index (PMI) declined steeply by 7.4 points to 49.1 in September, reversing the gains made over the last few months, said Abdul Davids, Head of Research at Kagiso Asset Management.

The index is now below the key 50-point mark for the first time since March 2013 and is also lower than the PMI readings of China and the Eurozone. The flash Eurozone manufacturing PMI remained relatively stable at 51.1 in September, while the final HSBC manufacturing PMI for China was unchanged at 50.2 points.

Following a significant improvement to 59.2 in August, the Business Activity Index plunged to 46.7 in September. Despite the weak monthly figure, the quarterly reading is more optimistic as the index measured 52.6 in Q3, up from 51.7 and 49.8 in Q2 and Q1 respectively, said Davids.

The New Sales Orders Index lost 9.4 points in September, reflecting the knock-on effects to the wider manufacturing sector from the prolonged strike activity in the vehicle manufacturing sector. “Intermittent mining sector disruptions and fears about future industrial action may also be weighing on manufacturers,” says Davids. “If this is the case, an end to the vehicle component strike and a quick resolution to AMCU’s strike in the platinum mining sector should see an imminent rebound in activity and orders.”

After moving above 50 in August, the Employment Index lost 1.7 points to end at 49.5 in September. On a quarterly basis, the employment data (49.4) suggests that a recovery in factory sector employment is unlikely over the short-term. However, the Q3 average is a solid improvement on the bleak 44.7 recorded in Q2.

The Price Index (which experienced significant upward pressure from higher fuel, electricity and labour costs for most of this year) declined by 4.5 points to 82.7. While this easing is likely owed to a more stable oil price in September, the index is still at a relatively high level. “We expect this index to remain high as Brent crude oil prices remain elevated and the Rand exchange rate fluctuates around the R10 level to the US dollar,” says Davids.

Lastly, the index measuring expected business conditions in six months’ time lost four points to reach 51.8, indicating that purchasing managers were less optimistic about future prospects. This weaker sentiment was supported by the PMI leading indicator, which remained below 1 in September.

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

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 CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management!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!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!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!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!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