South Africa’s purchasing managers’ index (PMI) moved into expansionary territory in August after two consecutive months below the key 50 line, indicating a recovery in demand for factory goods.
The PMI edged up to 50,3 in August from 49,5 in July and 48,4 in June, a survey by the Bureau of Economic Research and sponsored by Kagiso Securities showed on Wednesday.
“The new sales orders index increased by 3,5 points to move back above the key 50 level, indicating that demand for factory goods recovered somewhat in August,” Theo Vorster of Kagiso Securities said.
Also supporting PMI was a continued moderation in the rate of job losses in the manufacturing sector, with the employment subcategory rising in the index for the second month running, hitting 48,3.
The manufacturing sector is one of the biggest contributors to the economy and a key employer in a country where more than a quarter of the labour force is unemployed.
Purchasing managers were more upbeat about the outlook, with the expected business conditions subcategory rising to 59,6 from 57,7 in July.
But analysts have said a public-service strike in Africa’s largest economy could weigh on business activity and production.
Public servants have been on strike for the past three weeks, demanding above-inflation wage increments, while about 70 000 workers in the automotive sector planned to go on strike on Wednesday.
The business activity component in the PMI fell to 46,9 in August from 50,9 in July. — Reuters