Better exports boosted private sector output in October,
although the growth was at a slower pace than the previous month, while
new business has declined, according to a poll of factory managers
published on Thursday.
The Standard Bank-sponsored purchasing managers’ index (PMI) compiled
by financial information and services company Markit slipped to 50.2
points in October from 50.7 in September.
This showed a less severe decline than a Barclays bank-sponsored PMI
released on Tuesday, which found manufacturing activity fell to 45.9
points in October from 48.5 in September.
The Standard Bank-sponsored PMI found business activity increased at
the fastest pace in 18 months and was supported by the solid rise in new
export business. The poll found a second successive monthly improvement
in operating conditions.
New orders fell from expansion into contraction but the data
suggested a strong pickup in new export orders which rebounded six
points in October.
Markit found that employment continued to expand, although at a slower pace than in September.
The survey also revealed that competition and subdued cost inflation
led to the weakest increase in selling prices since July 2011, when data
collection began. The latest survey data highlighted ongoing pressure
on supply chains.
Markit also found that companies generally remained cautious about
their stock policies. However, some firms raised their purchasing
activity amid signs of rising demand.
Kuvasha Naidoo, Standard Bank economist said the leading PMI
indicator remained above one for the third consecutive month. "But with
both new orders and stocks of purchases printing below 50 points in
October, it is uncertain what this means in terms of expansion in the
private sector in the quarters to come," she said.
A PMI reading above 50 indicates a growing manufacturing sector, while below indicates contraction.
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