Bloomberg News

South African PMI Climbs Above 50 as Wage Strike Impact Eases

October 03, 2011

Oct. 3 (Bloomberg) -- South Africa’s purchasing managers’ index increased above 50 for the first time in three months, signaling an expansion in manufacturing as fewer strikes curtailed production, Kagiso Tiso Holdings said.

The seasonally adjusted index advanced to 50.7 in September from 46.7 in August, Johannesburg-based Kagiso said in an e- mailed statement today. The reading has been below 50, indicating a contraction in factory output, since July.

Manufacturing slumped in the second quarter as workers in the chemical, oil and mining sectors went on strike, crimping growth in Africa’s biggest economy to an annualized 1.3 percent, the slowest pace in about two years. The industry makes up about 15 percent of gross domestic product.

“The recovery in September should be seen as a move back to a more normal situation in the absence of industrial action,” Abdul Davids, Kagiso Asset Management’s head of research, said in the statement. “Soft global demand should ensure that the PMI remains relatively depressed in the foreseeable future.”

While the index measuring new sales orders increased by 4.3 points to 48.9 last month, it remained below the 50 level for a third consecutive month, Kagiso said. The business-activity index gained the most of any component, rising 7 points to 53.4, it said.

The employment index remained “stuck at very depressed levels,” increasing to 43.8 in September from 43.1 in the previous month, Kagiso said. South Africa’s unemployment rate rose to 25.7 percent in the second quarter, the highest of 61 countries tracked by Bloomberg.

--Editors: Nasreen Seria, Andrew J. Barden

To contact the reporter on this story: Andres R. Martinez in Johannesburg at

To contact the editor responsible for this story: Andrew J. Barden at

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