Market News

JOHANNESBURG, Nov 2 (Reuters) – South African manufacturing sentiment improved for a second month in October, but issues like weak domestic demand and logistics bottlenecks meant the improvement was only marginal, a purchasing managers’ index (PMI) survey showed on Monday.

• The seasonally adjusted PMI sponsored by South African bank Absa rose to 49.6 points in October from a revised 48.7 in the previous month.
• The 50-point mark separates expansion from contraction.
• All five sub-components recorded gains last month, but Absa called the recovery fragile.
• The business activity index edged higher to 48.6 points in October, and the new sales orders index increased to 46.8 points.
• “Both indices remain below the neutral 50-point mark, indicating that production and demand conditions remain under pressure,” Absa said in a statement.
• The index tracking expected business conditions in six months’ time fell to 51.7 in October from 55.3 in September, weighed down by logistics constraints and political uncertainty ahead of municipal elections on November 4.
• Absa said: “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”.