SA PMI bottoming out?
By Mokgatla Madisha
The seasonally adjusted Investec PMI level remained unchanged at 47 index points in September. Although business activity and new sales orders remained under pressure, the results reaffirmed some of the positive trends that emerged in the August release.
These include the continuation of the deceleration in input cost inflation, with the PMI price index dropping 6 points to reach 81.5 – the lowest reading since January. Inventory levels also rose further during September. Moreover, purchasing managers once again made an upward adjustment to their expectations regarding business conditions in 6 months’ time.
In all, the readings suggest that a bottoming out of the deterioration in manufacturing business conditions might be underway. However, the weakening global economic outlook poses a risk to producers’ nearterm prospects.
Source: Mokgatla Madisha, Investec Asset Management, October 1, 2008.
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