Factory output growth remains under pressure - PMI

Cape Town – Factory sector output growth remains under pressure, the latest Barclays Purchasing Managers’ Index (PMI) revealed on Thursday.

While the seasonally adjusted PMI reversed October’s loss and rose by 2.4 points to 48.3 index points in November, this was the fourth straight month that the index stayed below the neutral 50-point mark.

New sales orders increased to 51.4 index points, which boosted the November figure.

However, the Bureau for Economic Research said the average for the first two months of the fourth quarter is 1.8 points below that of the third quarter.

“In the absence of official data for the fourth quarter, the PMI suggests that output is likely to remain subdued after a 1.3% quarter-on-quarter contraction in manufacturing production in the third quarter,” it said.

“Also lingering below 50 points is the inventory index which fell by a further two points to 45.2 in November.”

“After moving lower for four consecutive months, the price index reversed the trend and rose to 65.6 points in November, up from 59.4 in October.

“The increase was likely driven by the hefty fuel price hike at the start of November, but the expected fuel price decline in December could alleviate some of the upward pressure on costs.”

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