South Africa’s PMI inches down to 50.4 in May, environment remains challenging

By bne IntelliNews June 3, 2013

South Africa’s seasonally adjusted Purchasing Managers’ Index (PMI) edged down by 0.1 points to 50.4 in May, staying above the 50 mark that separates expansion from contraction. However, both the business activity and new sales orders sub-indices lost ground, suggesting subdued demand in the manufacturing sector, the sponsor of the survey Kagiso Tiso Holdings said.

The headline PMI, which is a key measure of factory activity, was underpinned by robust increases for the inventory and employment subcomponents. The inventory index rose by 7.7 points to 54.7 and the employment index gained 5.1 points to a still depressed level of 47.2. The new sales orders index lost 2.6 points to 51.1, while the business activity index declined by 1.6 points to 50.6 after a solid gain in April.

The PMI indicated also that price pressures have accelerated, with the price index rising by 4.4 points to 82.4. This development can be explained by the sustained weakness of the rand.

Looking forward, the PMI gave mixed signals, as the index measuring expected business conditions in six months’ time rose for the second straight month, while the PMI leading indicator (the ratio of new sales orders to inventories) fell to below 1 again, 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        
  May-13 Apr-13 Mar-13 Feb-13 Jan-13
Business activity 50.6 52.2 47.7 52.2 49.6
New sales orders 51.1 53.7 52 60.2 50.9
Backlog of sales orders 37.6 38.5 40.6 36.3 30.6
Inventories 54.7 47 55.6 55.6 56.8
Purchasing commitments 50.6 48 53 54.7 43.3
Expected business conditions 54.1 51.3 47 56.8 58.2
Suppliers’ performance 50.6 54.5 51.4 51.8 48.8
Prices 82.4 78 87.3 86 82
Employment 47.2 42.1 42.6 45.7 42.3
PMI, seasonally adjusted 50.4 50.5 49.3 53.6 49.1
PMI, not seasonally adjusted 49.6 48.1 49.8 52.9 44.3
Source: Kagiso Tiso          
Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

South Africa’s MTN to invest $350mn in Iranian broadband

South Africa’s MTN said it has agreed, on a non-binding and preliminary basis, to invest an initial $350mn into Iranian fixed broadband provider Iranian Net. The investment will give ... more

South Africa receives another downgrade to junk

Fitch Ratings on April 7 downgraded South Africa to junk status following the removal of Pravin Gordhan as finance minister and the enusing political crisis. Fitch's downgrade to 'BB+' ... more

S&P downgrades South Africa's credit rating to junk after cabinet reshuffle

Standard & Poor’s ratings agency has cut South Africa's sovereign credit rating to 'BB+' from 'BBB-' and the long-term local currency rating to 'BBB-' from 'BBB', both with a negative ... more

Most Read

  1. Erdogan lashes out at Germany, Nato, says "God willing" he'll have Russian missiles soon
    2 days ago
  2. STOLYPIN: Donbas continues to be as unpredictable as it is unloved
    2 days ago
  3. Ukrainian farmers turn to Donbas veterans for protection from raiders
    2 days ago
  4. EU allows Gazprom to use an additional 40% of OPAL gas pipeline's capacity
    3 days ago
  5. Tajik president’s 23-year old daughter appointed deputy head of largest Tajik bank
    7 days ago
  1. Erdogan lashes out at Germany, Nato, says "God willing" he'll have Russian missiles soon
    2 days ago
  2. CHINA RISING: When sleeping giants meet
    16 days ago
  3. STOLYPIN: Donbas continues to be as unpredictable as it is unloved
    2 days ago
  4. Belarus’ retail king Euroopt goes on the road
    22 days ago
  5. STOLYPIN: Russia’s cyber-challenge cuts both ways
    24 days ago

Selected articles from our premium news/views wire IntelliNews Pro

Login to IntelliNews Pro
Get IntelliNews Pro

Reports

Dismiss