S.Africa's industrial index falls for third straight month in June

Reuters, Saturday 2 Jul 2011

South Africa's headline indicator reveals manufacturing is still expanding but not with the same momentum in June, hitting the lowest level this year

South Africa's Purchasing Managers' Index (PMI) fell to 53.9 in June from 55.1 in May, sponsor Kagiso Securities said on Friday.

The index has now recorded three consecutive months of decline and is at its lowest level this year, after rising from 51.7 in December last year.

"Although the level of the index suggests that the manufacturing sector is expanding, it also signals a moderation in the sector's growth momentum. The recent trend is in line with global factory sector developments," said Abdul Davids, head of research at Kagiso Asset Management.

The manufacturing production cycle tracks international factory sector developments with a couple of month's lag.

Growth in factory output slowed sharply to 0.4 per cent year-on-year April from 4.6 per cent in March.

All but one of the survey's sub-indices lost ground in June and managers were less optimistic about future business conditions.

However the overall PMI index, a key measure of manufacturing activity, has managed to stay above 50 since November last year.

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