Subscribe & Follow

Advertise your job vacancies

Jobs

Paint Industry Branch Supervisor Plettenberg Bay

Experts remain pessimistic about manufacturing

5 Dec 2016

Although factory managers were upbeat about their performance in November, experts say such output was unlikely to contribute meaningfully to economic growth this quarter.

The Barclays-sponsored purchasing managers index reversed October's losses in November and rose 2.4 points to 48.3, data compiled by the Bureau for Economic Research showed on Thursday.

Three of six subindices rose and the PMI leading indicator edged up, as new sales orders outpaced inventories. This signalled that production could lift in coming months.

Investec economist Kamilla Kaplan said actual manufacturing production in the fourth quarter will not recover "meaningfully" from the 1.3% quarteron-quarter seasonally adjusted contraction in the third quarter.

Philippa Rodseth, Manufacturing Circle CEO, said the industry, which contributes 13.7% to GDP, remained "fragile".

On Thursday, Statistics SA said electricity production rose 2% year on year compared to 1.1% in September. But consumption fell by 1.3% year on year as economic activity remained weak.

Tafadzwa Chibanguza, senior economist at the Steel and Engineering Industries Federation of Southern Africa, said "we have not yet turned the corner."¦ With production in the metals and engineering sector having contracted 4.18% at our latest reading, it would take a lot more successive monthly increases to turn the trend around."

Increased orders lifted the Barclays business activity subindex to 48.9 points from 43.5 points in October.

Bureau for Economic Research economists said the improvements should be sustained but tax hikes likely to be announced in the Treasury's 2017 budget may further dampen consumer spending.

John Ashbourne, an economist at Capital Economics, said while below-50 PMI readings were not accompanied by sharp drops in manufacturing output, they have been a reliable sign of weak growth or stagnation.

"Early signs are that the economy was pretty weak going into [the fourth quarter]."

Source: Business Day

Source: I-Net Bridge

For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.

We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field.

Go to: http://www.inet.co.za