South African Manufacturing Activity Updates

JOHANNESBURG (Reuters) – South African manufacturing activity increased in September, recovering from the previous month’s slump as demand rose and an interest rate cut boosted sentiment, according to the Absa-sponsored purchasing managers’ index (PMI) survey released on Tuesday.

Absa’s seasonally adjusted PMI for the factory sector rose to 52.8 points in September from 43.6 in August, staying above the 50-point mark that indicates growth.

“Both domestic and export demand showed signs of improvement. On the local consumer front, the recent interest rate cut adds to the expectation of a possible more positive demand story going forward,” local bank Absa, the survey’s sponsor, stated.

“The positive PMI results suggest that the manufacturing sector is stabilising after a turbulent period, although challenges remain, particularly in employment,” Absa noted.

The 9.2-point jump in the index in September more than compensated for the 8.8-point drop witnessed in August.