Bloomberg News

South Africa’s PMI Rises in January as Weak Rand Boosts Exports

February 01, 2013

South Africa’s purchasing managers’ index rose in January as a weaker rand may help boost exports and mining output resumed after strikes at platinum and gold mines, Kagiso Tiso Holdings said.

The seasonally adjusted index increased to 49.1 from 47.4 in November, Johannesburg-based Kagiso said in an e-mailed statement today. An index level below 50 indicates a contraction in factory output. The Bureau for Economic Research, based at the University of Stellenbosch near Cape Town, conducts the PMI survey for Kagiso.

“The apparent stabilization in the EU economy and the weaker rand exchange rate may have helped,” Hugo Pienaar, senior economist at the BER, said in the statement. “Unfortunately, the latest PMI results also contain some worrying developments.”

South Africa’s economy is slumping as concerns about growth in Europe, the U.S. and China sap demand for manufactured exports. Strikes at platinum and gold mines last year shaved about 0.5 percentage points off economic growth. The rand has dropped 5.4 percent this year against the dollar, the worst performer among 25 emerging-market currencies tracked by Bloomberg.

The index measuring employment sank 2.4 points to 42.3, Kagiso said. The business activity index rose 2.3 points to 49.6, while the new sales orders index increased 6 points to 50.9, it said. The price sub-index rose to 82.

South Africa’s 25.5 percent jobless rate is at risk of rising as Anglo American Platinum Ltd. (AMS), the world’s largest producer of the metal, considers firing as many as 14,000 workers and shutting four mines. Other mining companies are also considering job cuts.

To contact the reporter on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net


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