South African PMI Little Changed in October, Staying Near 50
South Africa’s purchasing managers’ index was little changed in October, staying close to 50 for a second month, as expansion in manufacturing remained weak, Kagiso Tiso Holdings said.
The seasonally adjusted index advanced to 50.5 from a revised 50.2 the month before, Johannesburg-based Kagiso said in an e-mailed statement today. Last month’s level was the highest in four months.
Manufacturing, which makes up about 15 percent of gross domestic product, slumped in the second quarter following a series of strikes in the chemical, petroleum and mining industries. It has since rebounded as companies boosted output to make up for lost production, though a debt crisis in Europe, which buys about a third of manufactured exports, may undermine that recovery.
“For the last two months, the PMI has suggested stagnant month-on-month factory sector output,” Abdul Davids, Kagiso Asset Management’s head of research, said in the statement.
Last month, the new sales orders index rose 1.3 points to 51.6, suggesting “a mild increase in the demand for South African-produced factory goods.” Manufacturers expect an improvement in sales in coming months, with the index measuring expected business conditions rising to 62.4 in October from 60.8 the month before, Kagiso said.
The employment index rose to 45.6 from 43.9, indicating manufacturers have slowed the pace of job losses. South Africa’s unemployment rate of 25.7 percent for the second quarter is the highest of 61 countries tracked by Bloomberg.
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