PMI increases for fourth consecutive month
The contraction of SA’s manufacturing sector slowed slightly in November, judging from the Absa Purchasing Managers Index (PMI).
The seasonally adjusted PMI rose to 48.6 index points in November 2017 from 47.8 index points in October.
A score above 50 indicates an expanding manufacturing sector.
Absa said on Friday: "This was the fourth consecutive increase and brought the index to the best level since May 2017. However, the PMI remained stuck below the neutral 50-point mark for a sixth straight month, suggesting that the sector still faces headwinds."
"The average reading for the fourth quarter (so far) is well above the average recorded in the third quarter, which is a tentative suggestion that the sector may again record positive growth in the final quarter of the year," it added.
The index is compiled by the Bureau for Economic Research and gauges manufacturing activity.
"This was the third consecutive increase and brought the index to the best level since May 2017. Nonetheless, the PMI remained stuck below the neutral 50-point mark," Absa said in a statement on Wednesday.
NKC economist Gerrit van Rooyen did not expect to see a major improvement in business conditions in the manufacturing sector in 2017 although manufacturing is expected to make a positive impact on the GDP figures which will be released on Tuesday.
Last week, the Manufacturing Circle introduced its map to a million initiative to create a million new jobs in the sector in a bid to stimulate growth.
The Standard Bank PMI, which will also be released on Tuesday, looks at the whole economy, while the Absa one focuses on the manufacturing sector.