South Africa’s PMI improves in June, but manufacturing conditions stay tough

By bne IntelliNews July 1, 2013

South Africa’s seasonally adjusted Purchasing Managers’ Index (PMI) improved by 1.2 points to 51.6 in June, staying above the 50 mark that separates expansion from contraction for a third consecutive month, but manufacturing conditions remained tough, the sponsor of the survey Kagiso Tiso Holdings said in a statement. It noted that there were modest improvements across all the major sub-indices, with only the employment sub-index declining last month. For Q2 2013, the PMI index was by 0.1 points higher compared to Q1 2013, at 50.8.

The two sub-indices with the largest weight in the PMI, business activity and new sales orders, were the major contributors to the improvement of the headline index last month. The business activity index gained 1.6 points to 52.2 points, but the level of the index at just above 50 suggests that manufacturing output remained under pressure, Kagiso Tiso said. The new sales orders index increased by 2.9 points in June to 54, indicating an improved demand for manufactured goods.

The employment index fell by 2.3 points last month to 44.9, reflecting a sustained weak employment environment.

The price index edged down by 0.2 points to 82.2 in June, indicating that producer prices remain rigid at these high levels. The relatively high index level is a sign that manufacturers face sustained input cost pressure, partly caused by the significant weakening of the rand, which makes imported materials used in the manufacturing process more expensive.

Looking forward, South African purchasing managers expect the situation to remain challenging with muted demand and relatively high input prices. The sub-index measuring expected business conditions in six months’ time declined by 1.3 points to 52.8 in June. The PMI leading indicator (the ratio of new sales orders to inventories) stayed below 1 for a second straight month, at 0.9, showing that the level of purchased stock exceeded the demand for manufactured goods, which does not bode well for future factory sector production.

Kagiso Purchasing Managers Index        
  Jun-13 May-13 Apr-13 Mar-13 Feb-13 Jan-13
Business activity 52.2 50.6 52.2 47.7 52.2 49.6
New sales orders 54 51.1 53.7 52 60.2 50.9
Backlog of sales orders 33.5 37.6 38.5 40.6 36.3 30.6
Inventories 55 54.7 47 55.6 55.6 56.8
Purchasing commitments 40.3 50.6 48 53 54.7 43.3
Expected business conditions 52.8 54.1 51.3 47 56.8 58.2
Suppliers’ performance 52.2 50.6 54.5 51.4 51.8 48.8
Prices 82.2 82.4 78 87.3 86 82
Employment 44.9 47.2 42.1 42.6 45.7 42.3
PMI, seasonally adjusted 51.6 50.4 50.5 49.3 53.6 49.1
PMI, not seasonally adjusted 47.7 49.6 48.1 49.8 52.9 44.3
Source: Kagiso Tiso            

Related Articles

UK’s Vedanta Resources to invest $1bn in Zambian copper mine

The UK-listed diversified resource and mining company Vedanta Resources will invest $1bn in its Zambian mining unit Konkola Copper Mines (KCM), creating 7,000 jobs, the mining firm said in a ... more

Almaty cost of living lowest among major cities

Kazakhstan’s largest city and business centre Almaty has dropped to last place on the Economist Intelligence Unit’s bi-annual ranking of the ... more

AB InBev sells 54.5% stake in African Coke bottling business for $3.15bn

Anheuser-Busch InBev will sell a 54.5% stake in Africa's largest Coke bottler to Coca-Cola Company for $3.15bn, the two companies said in a joint statement on December 21. The deal is expected to ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss