Manufacturing battles to gain traction

More evidence came yesterday that South Africa’s manufacturing sector is struggling to gain traction. The Kagiso purchasing managers index (PMI) fell into recessionary territory last month, to a seasonally adjusted 46.2 from 50.2 in August. It is the lowest since July last year when the sector was hit by widespread strikes. A figure below 50 implies the sector is starting to contract. Chartered Institute of Purchasing and Supply managing director André Coetzee said: “The deterioration in the local manufacturing sector has been stark in recent months. Following an average level of 54.7 points during the first five months of 2012, the PMI only averaged 48.9 between June and September.” The domestic PMI was closely in synch with the factory sectors of South Africa’s key trading partners, Coetzee noted. The official September PMI reading for China, released yesterday, was 49.8. While China’s PMI was slightly above the 49.2 in August, a falling trend was seen in several countries. – Ethel Hazelhurst