SA factories look set for turnaround, in surprise result from key health gauge
SA’s factories could be set for a turnaround — confounding expectations from a key gauge of the manufacturing sector’s health. The Absa purchasing managers’ index (PMI) breached the 50-point neutral level in July, after two months of contraction. The index jumped to 51.5 in July after falling to 47.9 in June. Four out of five of the key subcomponents were in positive terrain. The PMI gauges activity in the manufacturing sector and is usually a good indicator of where the production numbers will head in two months. A figure above 50 points to expansion in the sector. The July recovery was driven by an improvement in demand, seen by the increase in the new sales orders index, which filtered through to higher business activity.
The output index managed to edge above 50 points for the first time since February, which contributed to the increase in the employment index. However, the inventories index remained stuck below 50. The index tracking expected business conditions in six mo...
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