SA’s producers are less optimistic now than they were in April
South African factory managers turned pessimistic again in May after briefly embracing optimism in April.
On Friday, Stellenbosch University’s Bureau of Economic Research (BER) reported that its monthly manufacturing purchasing managers index (PMI) fell to 49.8 points in May from 50.9 points in April.
The PMI has oscillated around the neutral 50-point level since January.
It breached the 50-point level in February for the first time in nine months then fell back under in March, only to lift above the mark in April and then fall under 50 again in May.
Of the nine components of the PMI, the sharpest decline of five points was registered for new sales orders, which fell to 51.5 from 56.5 points.
BER described April’s new sales orders score as unusually high. It jumped 11 points from 44.5 points in March to 56.5 points April.
Suppliers’ performance showed the best improvement of four points, taking it to 51.8 points in May.
The monthly survey tends to foreshadow by two months the more comprehensive manufacturing sales and output data Statistics SA publishes.
Statistics SA’s most recent manufacturing report was for March, showing a 1.3% annual decline in South African factory output.
The March figure indicated manufacturing would contribute a 1.7% decline to SA’s first quarter gross domestic product (GDP), which Statistics SA is scheduled to release on June 5.