The glass-half-full complexity of the SA economy
South Africa most depressed sector, manufacturing, is showing some signs of life. The purchasing managers index (PMI), a reliable health gauge for factory output, leapeed to 48 from 39.3 — its highest level since May last year. This is excellent news because of the speed of the rise, the second biggest in the 10-year history of the index. It is also good because it takes the index close to the critical 50 level, which denoted the dividing line between economic expansion and the current, continuing contraction. Yet, all kinds of other indexes are showing slow, or slower than expected, emergence from recession. Private sector credit growth slowed in August to its lowest level in five years and consumer confidence fell in the third quarters. Earlier this week, it was announced that house prices are still falling, albeit at a lower rate. Yet, manufacturing around the world is on the rise, and that may drag local manufacturing up with it. “I think we could be back in positive territory by next month,” said Andre Coetzee, head of fixed income and currency futures at Kagiso Securities. “Looking at the global picture, manufacturing looks like it has turned the corner at the moment,” he told Business Day.
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