Summary
The seasonally adjusted PMI witnessed a rise to 51.7 points in February.
Improvement seen in the business activity sub-index and new sales orders, though still negative.
In terms of exports, respondents revealed an optimistic outlook, signifying a potential easing in local harbour disruptions, as expressed by PMI sponsor, Absa.
South Africa is witnessing an unprecedented logistic and power supply disturbance impacting the business activities and tamping down growth in the industrial sector.
PMI Increase in February
February saw a notable increase in the seasonally adjusted PMI, rising to 51.7 points from a 43.6 in January – an advance beyond the crucial 50-point threshold that demarcates expansion from contraction.
Performance of Business Activity Sub-index and New Sales Orders
In terms of the business activity sub-index and new sales orders, an improvement was observed in February. However, both continued to be negatively impacted.
Optimism in Exports Despite Local Harbour Disruptions
The positive outlook embroidered by respondents regarding exports may hint at some relief from the congestion and disruptions at the local harbours. Such observations were made explicit in a statement by the PMI’s sponsor, Absa.
Challenges in South Africa’s Economy
South Africa, being one of the most industrialised African economies, is currently troubled by record power shortages and a logistics crisis affecting its rail and port operator Transnet. These challenges have significantly hindered business activity and slowed down the economy’s growth.
Source: https://www.cnbcafrica.com/2024/south-african-factory-activity-recovers-in-february-absa-pmi/
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