South African PMI Climbs Above 50, Indicating Expansion in Manufacturing
The seasonally adjusted index rose to 52.9 from 49.8 in October, Johannesburg-based Kagiso said in an e-mailed statement today. The index had been below 50, indicating a contraction in factory output, for the past two months.
Manufacturing, which accounts for 15 percent of the economy, has been slow to recover from last year’s recession, limiting growth in Africa’s biggest economy to 2.6 percent in the third quarter. The Reserve Bank has cut its benchmark interest rate three times this year to 5.5 percent, the lowest in three decades, to help spur consumer spending and growth.
“A further encouraging development is that the purchasing managers expect the improved conditions to persist,” Theo Vorster, a director at Kagiso, said in the statement.
The index measuring business activity climbed to 54.8 in November from 48.7 in the previous month, while the new sales orders sub-index increased 5 points to 56.5, Kagiso said.
Manufacturers also slowed the pace of job-shedding last month, the survey showed. While the employment sub-index was still below 50, indicating the industry was cutting jobs, it rose to 47.6 from 44.8 in October. South Africa’s unemployment rate of 25.3 percent is the highest of 62 countries tracked by Bloomberg.
The Bureau for Economic Research, based at the University of Stellenbosch near Cape Town, and the Institute of Purchasing and Supply South Africa conduct the PMI survey on behalf of Kagiso.
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