South Africa’s Manufacturing Sector Expands At Slower Pace

02 April 2012 11:00am - Mark Maffia

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South Africa’s Manufacturing Sector Expands At Slower Pace

South Africa’s Purchasing Managers Index (PMI), an indicator designed to measure the health of the manufacturing industry, fell to 55.1 in March from a two year high of 57.9 in February. Although this figure is above the 50 mark that separates contraction from expansion South African business activity and new sales orders declined.

Kagiso Asset Management said that business activity index made the largest negative contribution, giving up 7.4 points to 57.8 while new sales orders were down 5.1 points at 59.7. New business received by South African manufacturers increased significantly during the month, but the rate of growth slowed from the previous month. Employment in the sector continues to remain stable. Factory output, which accounts for 15% of the economy, is struggling to recover as a probable recession in Europe hinders demand from a region that buys about a third of South African manufactured goods. This is undermining growth in Africa’s biggest economy, which the government forecasts will expand 2.7% this year compared with 3.1% in 2011.

Hugo Pienaar, senior economist at the Bureau of Economic Research, which conducts the survey on behalf of Kagiso said in statement, “Although remaining at a favourable level. The forward-looking indicators of the PMI also pointed to a somewhat less optimistic outlook.”

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Related Links:
• Purchasing Managers Index
March 2012
• Bureau for Economic Research
Economic Indicators
• Economic Calendar
Scheduled Economic Events

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