Sentiment in South Africa’s manufacturing sector improved for a second consecutive month in October, although weak domestic demand and persistent logistics bottlenecks continued to constrain the industry’s recovery, according to a purchasing managers’ index (PMI) survey released on Monday.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 49.6 points in October, from a revised 48.7 points in September, indicating a marginal improvement in business conditions.
Despite the increase, the index remained below the 50-point threshold that separates expansion from contraction, suggesting that manufacturing activity was still under pressure.
The survey, sponsored by Absa and compiled by the Bureau for Economic Research (BER), showed that all five components of the headline index recorded improvements during the month.
However, the gains were insufficient to push the manufacturing sector back into expansion territory, with businesses continuing to face subdued demand and operational constraints.
The business activity index edged up to 48.6 points in October, while the new sales orders index increased to 46.8 points. Both indicators remained below the neutral 50-point mark, reflecting continued weakness in production and demand.
Absa said the improvement in the headline PMI should be treated cautiously, describing the recovery as fragile.
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