By Sfundo Parakozov.
South African manufacturing sentiment improved in September after three months of contraction, helped by a rebound in new orders, a purchasing managers’ index (PMI) survey showed on Thursday.
The seasonally adjusted PMI sponsored by South African bank Absa rose to 50.7 points in September from 45.8 in August, moving back above the 50-point mark that separates expansion from contraction for the first time since May.
The new sales orders index climbed to 50.8 from 40.3, while the business activity index recovered to 49.3 from 40.2, recouping August’s sharp decline, the survey showed.
Absa said in a statement: “The September PMI marks a welcome improvement after a weak winter period, particularly given the sharp rebound in new orders.”
However, it said the overall picture was not uniformly positive as “actual business activity remained just below the neutral mark, employment weakened, and order backlogs stayed subdued”.
It pointed to shipping delays at Durban port as a lingering logistics bottleneck and said input cost pressures had intensified last month.
Manufacturers are cautiously optimistic about the outlook, with the index tracking expected business conditions in six months’ time edging up to 55.3 from 54.7.