CAPE TOWN: Activity in the manufacturing sector improved last month amid a pickup in business activity and new sales orders, a key index showed on Monday.
The seasonally adjusted Kagiso purchasing managers’ index (PMI), which gauges activity in manufacturing, rose to 50.8 last month from 45.4 in April – the first time in three months that the index was above 50. A reading of above 50 suggests that activity in manufacturing is expanding.
The latest data suggested that manufacturing output turned positive in the second month of the second quarter and if sustained, could support economic growth over the quarter. The biggest driver of the increase in the headline PMI was the solid recovery in the new sales orders index, which rose to 52.2 points from 42.3 in April.
The improvement in demand filtered through to a similar gain in the business activity index, which rose to 49.6 last month from 40.6 in April. These significant gains suggested that factors such as load-shedding and public holidays that held back the manufacturing sector in April were alleviated somewhat in May, according to Bureau for Economic Research (BER) economist Lisette IJssel de Schepper.
