JOHANNESBURG, Nov 2 – South Africa’s manufacturing sentiment improved for a second consecutive month in October, although weak domestic demand and logistics constraints continued to limit the sector’s recovery.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) increased to 49.6 points in October from a revised 48.7 points in September, according to survey data released on Monday.
Despite the improvement, the index remained below the 50-point threshold that separates expansion from contraction, indicating that manufacturing activity was still under pressure.
All five sub-components of the index recorded gains during the month. However, Absa described the recovery as fragile, pointing to continued weakness in production and demand.
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 level.
“Both indices remain below the neutral 50-point mark, indicating that production and demand conditions remain under pressure,” Absa said in a statement.
Expectations for business conditions over the following six months also weakened. The corresponding index fell to 51.7 points in October from 55.3 points in September, reflecting concerns over logistics constraints and political uncertainty ahead of South Africa’s municipal elections scheduled for November 4.
Although the headline PMI has improved over two consecutive months, the continued contraction in key activity and demand indicators suggests that manufacturers have yet to experience a sustained recovery.
Absa said the outlook would depend on whether demand and production could strengthen alongside easing cost pressures.
“A sustained recovery in demand and production, supported by easing cost pressures, will be important in determining whether the sector can move decisively back into expansion territory,” the bank said.
