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PMI Breaches 50 Mark
| News by Staff ReporterAfter the second consecutive monthly increase
The Kagiso Purchasing Manufacturers Index (PMI) increased for the second consecutive month in September, rising above the 50 mark and indicating expansion in the economy.An increase of four points to 50,7 was recorded in the Kagiso PMI during September 2011 from 46,7 in August.
According to Abdul Davids, head of research at Kagiso asset management, the PMI recovery in September was against the global trend.
“The global background is arguing for a weak PMI. We see evidence of a weak consumption side on our economy,” he said.
The business activity index showed the highest level of increase, rising nearly 7 index points to 53,4. Davids said this index had now recovered nearly all the losses experienced in July when a 19 point drop was recorded.
“With the exception of the employment index, which remained stuck at very depressed levels, most of the other PMI sub-components also painted a more optimistic picture relative to the previous two months,” said Davids.
Davids, however, warned that the recovery in September should be seen as a move back to more normal conditions.
“While a key short-term domestic constraint to production is now out of the way, soft global demand should ensure that the SA PMI remains relatively depressed in the foreseeable future,” he added.
Source: www.bizpremises.co.za
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