PMI shows third consecutive increase

For the third consecutive month, the Absa Purchasing Managers’ Index (PMI) rose to reach 57.4 index points by the end of March, up from 53 in February.

This increase is attributed to an improvement in all five measured indices.

Business activity rose by four points last month, which the recently released report said could be a sign of further recovery in the country’s manufacturing sector.

An increase in both export sales and domestic demand, likely due to the further lockdown restrictions led to the new sales orders index climbing by six points, ending at 60.4 by the end of the month.

Purchasing price went from 83.1 index points in February to 89 points in March thanks to a weaker Rand exchange rate and a spike in the price of Brent crude.

The inventories index rose to its highest level since October last year, ending on 56.1 points last month, while the supplier deliveries index surged to 69.8 points.

The worst performing index was employment at 44.4 points, which was also the only index to fall below the neutral 50-point mark.

This shows that despite some improvement in the national economy, jobs continue to be shed at a troubling rate. According to Stats SA’s latest Quarterly Employment Statistics, formal employment declined by approximately 13,000 jobs in the fourth quarter last year.

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