Picture: THINKSTOCK
Picture: THINKSTOCK

Manufacturers in SA are concerned at the subdued business sentiment reflected in the latest Barclays Purchasing Managers’ Index for December 2016, released on Thursday. Industry body, the Manufacturing Circle, said the index, which provides a reliable guide to sentiment within the manufacturing sector, had not shown an improvement in demand in several months.

"At 46.7 index points, the South African index has remained below the neutral 50-point measure for the fifth month in a row — in contrast to a global upward trend," it said.

"The Manufacturing Circle attributes persistent weakness of domestic demand as a likely contributor to under-performance," executive director Philippa Rodseth said, adding that SA’s growth rates remained marginal, and this negatively affected the demand for manufactured products.

Her comments came as manufacturing production rose 1.9% in November from a year earlier, offering a glimmer of good news for the economy’s growth prospects for the fourth quarter. Manufacturing is the country’s fourth largest economic sector.

However, output and sales from the sector shrunk 2.7% in October 2016, and mining production that month fell 2.9% year on year.

"Export-led growth may counter this trend, as local manufacturers export to a strengthening global industrial sector," Rodseth said. "We strongly believe that a sustained commitment to buying locally manufactured goods — by both the public and private sectors — is a vital move to increase demand."

BDlive

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