SA companies begin hiring as manufacturing grows

9 March 2011

Supply infrastructure still holding back South Africa

9 March 2011 | Angeline Albert   

The South African job market picked up last month against a background of rising input prices.

According to the latest South African Purchasing Managers’ Index (PMI), published by Kagiso, manufacturing activity expanded to 54.8 in February, up from 54.6 the previous month.

The PMI employment index started to grow again, reaching 51.6 last month – now above the no-change mark of 50 – compared to the 47.8 seen in January. It brings to an end nine consecutive months of contraction.

Input costs accelerated sharply, rising by more than 10 points in February to 80.7. This is the highest figure since the end of 2008.

“The fact that the oil price continued to increase in February amid sustained tension in North Africa may explain the continued rise in the PMI price index,” said the report. “As a result of the higher oil price, the department of energy announced that the diesel price will rise by 63 cents per litre at the beginning of March – this may see a further increase in the PMI price index during the month.”

Both new sales orders and business activity increased at a stable rate. The former reached 59, growing at a slower rate compared to January’s 59.6. Business activity rose slightly faster than the previous month, at 51.6 in February, up from 51.

But buyers were less optimistic regarding the outlook for future business conditions, with expectations at 61.3, lower than January’s figure.

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