PMI rises to six-year high as weaker rand boosts manufacturing

South Africa’s purchasing managers’ index (PMI) unexpectedly rose to its highest level in six years in August as a weaker rand made manufactured-product exports more attractive, Kagiso Tiso Holdings said.

The seasonally adjusted index climbed to 56.5 from 52.2 in July, Johannesburg-based Kagiso said in an e-mailed statement on Monday. The index has been above 50, an indication of expansion in factory output, for five months.

The median estimate of four economists surveyed by Bloomberg was for the index to drop to 51.5.

"We may be seeing the first signs of import replacement as the weaker rand improves the competitiveness of locally-manufactured goods, versus more expensive imported goods," Kagiso said. "The sustained weakness in the currency has improved the global competitiveness of our exports of manufactured goods."

The rand has dropped 17% against the dollar this year, the worst performer among 16 major currencies tracked by Bloomberg and reached a four-year low of 10.5096 per dollar on August 28. Some exporters are already benefiting from the weaker rand, Finance Minister Pravin Gordhan said in an interview on August 27.


The index measuring business activity rose 7.4 points to 59.2, Kagiso said. The new sales orders index climbed 2.5 points to 57.5, while the purchasing commitments index gained 11.6 points to 54.4, it said.

The Bureau for Economic Research, based at the University of Stellenbosch near Cape Town, conducts the PMI survey on behalf of Kagiso. – Bloomberg

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Rene Vollgraaff
Guest Author
Advertising

Eusebius McKaiser: Ramaphosa may want to swap title of president...

The president and the National Coronavirus Command Council have turned taxis into vectors of death

It’s just not cricket

Near Makhanda in the Eastern Cape in the village of Salem is a cricket pitch that is said to be the oldest in the country. Watered by blood and trauma, rolled with frontier nostalgia and contemporary paranoia, how does it play?
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday