PMI re­bounds in April

The Star Early Edition - - BUSINESS REPORT -

THE SEASONALLY ad­justed Absa Pur­chas­ing Man­agers’ In­dex (PMI) rose back to 51.5 in­dex points this month as busi­ness con­di­tions im­proved af­ter slump­ing to 44.7 points in April. The April sur­vey was the first data point avail­able af­ter the con­tro­ver­sial cab­i­net reshuf­fle late in March and sub­se­quent credit rat­ing down­grades in April, Absa said.

“The re­bound in May sug­gests that, as ex­pected, April’s de­te­ri­o­ra­tion was driven by a sour­ing of sen­ti­ment,” it said.

“The cur­rent level of 51.5 points is likely a bet­ter re­flec­tion of con­di­tions on the fac­tory floor than the dis­mal 44.7 points recorded in April. Nonethe­less, with­out any of­fi­cial man­u­fac­tur­ing data for the sec­ond quar­ter avail­able as yet, and el­e­vated volatil­ity in the re­cent PMI data, it is too early to call whether the sec­tor per­formed bet­ter in the sec­ond quar­ter com­pared to the first.”

In­vestec econ­o­mist Kamilla Ka­plan said look­ing ahead, a syn­chro­nised up­turn in global eco­nomic ac­tiv­ity and higher global trade mo­men­tum should lend sup­port to lo­cal ex­port ori­en­tated man­u­fac­tur­ers. Do­mes­tic de­mand should strengthen some­what, with im­proved mar­ket con­di­tions in the al­lied agri­cul­ture and min­ing in­dus­tries re­spec­tively, dis­si­pat­ing drought ef­fects and higher com­mod­ity prices.

Seifsa se­nior econ­o­mist Tafadzwa Chiban­guza said the fact that the in­dex had re­bound to an ex­pan­sion­ary level of above 50 points was a good in­di­ca­tion of a re­turn to the ex­pected level of man­u­fac­tur­ing in the econ­omy. – Staff Re­porter

Man­u­fac­tur­ing sec­tor ex­pan­sion is promis­ing.

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