Bloomberg News

South Africa PMI Gains, Signaling Improvement in Manufacturing

May 02, 2013

South Africa’s purchasing managers’ index rose in April, signaling that factories probably expanded output, Kagiso Tiso Holdings said.

The seasonally adjusted index increased to 50.5 from 49.3 in March, Johannesburg-based Kagiso said in an e-mailed statement today. A number above 50 indicates growth in factory output. The Bureau for Economic Research, based at the University of Stellenbosch near Cape Town, conducts the PMI survey for Kagiso.

“While this is a positive sign, the level of the index suggests that manufacturing production remains under pressure,” Abdul Davids, head of research at Kagiso, said. “Our key trading partners continue to grapple with tough conditions.”

Manufacturing and mining, which account for about 20 percent of the economy, have struggled to return to levels before a recession in 2009 because of strikes at mines last year and slumping demand from Europe. Gross domestic product will probably expand 2.6 percent this year, close to last year’s growth of 2.5 percent, according to the National Treasury.

The sub-index measuring business activity rose 4.5 points to 52.2, while the new sales orders index increased 1.7 points to 53.7, Kagiso said. The employment index dropped 0.5 point to 42.1, indicating manufacturers shed jobs, it said.

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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