Bleak manufacturing outlook as PMI keeps on falling
The poor PMI figure for September indicates that production in the manufacturing sector will be subdued
The outlook for the manufacturing sector in the third quarter looks bleak. The seasonally adjusted Absa purchasing managers index (PMI), which gauges activity in the manufacturing sector, hovered at a very weak 43.2 points in September from 43.4 the month before. The average level of the PMI in the third quarter was 46 index points, which is the lowest average since the third quarter of 2017. “The latest figure dashed any hope that the sharp PMI decline in August was a once-off occurrence,” Absa said in a statement on Monday. A figure below 50 indicates contraction in the sector. The PMI is usually a good indicator of where the production numbers will head in two months.
“While high-frequency activity data from Statistics SA suggests that the economy will exit the technical recession in the third quarter, the PMI survey inspires little hope that the economy staged a strong recovery,” said Absa. The PMI dropped slightly with declines in three of the five subcomponents of the he...
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