Following a strong close to Q3, the seasonally adjusted Absa PMI dipped slightly by 0.7 points to 52.6 in October, down from a revised 53.3 in September.
Although the PMI fell, it remained above 50 for the second consecutive month, indicating continued expansion in the manufacturing sector.
This positive momentum, last seen in late 2022 and early 2023, signals stability and sustained growth as the sector enters Q4.
Key highlights from the October 2024 PMI include:
- Business Activity Growth: The business activity index increased by 4.1 points to 55.6, indicating improved production levels and a notable expansion in manufacturing activity.
- Steady Demand: New sales orders eased by 1.4 points to 54.8, but remained comfortably above 50, reflecting sustained demand in both domestic and export markets. Local demand is expected to pick up, buoyed by recent interest rate cuts and lower inflation rates.
- Supplier Performance: The supplier deliveries index dropped by 5.3 points, showing improved performance as suppliers adapted to stronger activity levels.
- Employment Index: The employment index inched up by 0.5 points but stayed just below 50, indicating continued caution among manufacturers. Sustained demand growth will be essential for driving job creation in the sector.
- Easing Cost Pressures: The purchasing price index fell to 60 points, marking its lowest level since early 2018. October benefited from fuel price cuts, although a minor increase in fuel prices is anticipated next week.
- Business Outlook: The index tracking expected business conditions six months ahead decreased to 62.7 from 70.8 in September. Despite the drop, it remains above the long-term average, indicating overall optimism.
The October PMI results underscore steady expansion in South Africa’s manufacturing sector, as easing cost pressures and a positive demand outlook contribute to resilience.
However, manufacturers remain cautious on employment, and sustained growth will be key for a broader recovery.