PMI falls to 51,1 in May

South Africa’s purchasing managers’ index (PMI) fell for the third consecutive month to a seasonally-adjusted 51,1 in May from 55,2 the previous month, a survey showed on Tuesday.

Sponsor Kagiso Securities while the level of the index continued to indicate expansion in the factory sector, the latest reading, the lowest since November 2009, suggested the pace of manufacturing production had eased in recent months.

“While the level of the index continues to indicate that the factory sector is expanding, the latest reading is the lowest since November 2009 and suggests that the pace of manufacturing production has eased in recent months,”

The seasonally adjusted PMI fell in May by 4,1 index points to reach 51,1.

So far in the second quarter of 2010, the PMI had averaged 53,2 versus 56,5 in the first quarter.

In terms of a quarterly average, the PMI reached a trough of 37,2 in the second quarter of 2009 — in other words the gain up to the first quarter of 2010 amounted to 19,3 index points.

“Globally there has been a lot of emphasis on the impact of inventories in helping to drive countries such as the US out of recession,” said Andre Coetzee, head of fixed income at Kagiso Securities.

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