South Africa buyers see stronger growth

3 December 2010

5 December 2010 | Lindsay Clark

The South Africa Kagiso PMI bounced back into positive territory in November, the survey of buyers showed.

Figures from research organisation Kagiso revealed the index jumped by three points to reach 52.9 last month. November’s gain followed two consecutive months of below the 50 no change mark. A figure below 50 indicates a contraction in activity.

Within the research, the business activity index posted a robust gain of 6.1 index points reaching 54.8 in November. This was a stark improvement on October, when performance was weak, but not as weak as August and September which suffered strike-induced declines.

New sales orders also showed signs of optimism, reaching 56.5 in November, five points up on the previous month’s score.

Meanwhile evidence suggests purchasing managers believe the improved conditions will last. The expected business conditions index gained 4.3 points and came in at 64.6 in November, the highest level since April.

Employment was the only measure to remain in negative territory, although it did show improvement. It rose by 2.8 index points to 47.6.

Input purchasing prices also picked up in November with the PMI price index increasing to 61.8, up by 5.4 index points compared to October. “Given that the long-term average for the index is just below 69 points, the November reading is still some way below the average and points to fairly benign input cost pressure,” the report said. “However, the November gain may reflect the higher crude oil price witnessed over the past month.”

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