JOHANNESBURG – Data from the Absa Manufacturing Purchasing Managers Index (PMI) yesterday showed that the sector continued its weakness into the fourth quarter of year, sliding to a 16-month low in October.
The PMI fell to 42.4 points, sliding further into contraction from the 44.5 points recorded in September.
An economist at Capital Economics John Ashbourne said the breakdown of the headline index shows weakness across the key sub-indices, all of which remained below the neutral 50 points mark.
“Perhaps most worryingly, the measure showing expectations for future business conditions slipped from 45.8 to 41.7, suggesting that respondents have little optimism that conditions will improve,” Ashbourne said.
The data showed that the business activity index remained virtually unchanged at a weak level in October, increasing marginally to 40.3 points from 40.2 points in the previous month.
The new sales orders index fell 3.1 points to 39 points last month, the lowest level since July last year, while the employment index edged up slightly to 44.2 points last month from 43.3 points.
StatsSA's latest Quarterly Labour Force Survey showed formal employment in the manufacturing sector dropped 29000 quarter-on-quarter in the third quarter.