Uptick in Purchasing Managers Index

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By Andre Roux

The seasonally adjusted Investec PMI increased to 47 in August, up 4.2 index points from the July reading of 42.8. Business activity as well as new sales orders improved during the month. Furthermore, the PMI price index declined to 87.5 on the back of softer international commodity prices and the stronger rand exchange rate.

Purchasing managers outlook has improved somewhat. Both inventory levels and purchasing commitments gained during the month. Expectations of business conditions in 6 months’ time were also adjusted upwards in August.

While weaker global demand is likely to continue exert some pressure on the domestic manufacturing sector, the uptick in the latest reading coupled with an improvement in purchasing managers expectations indicates somewhat better prospects in the medium term.

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Source: Investec Asset Management, September 1, 2008.

 

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