Manufacturing sector bounces back

THE manufacturing sector grew last month for the first time in over a year, a purchasing managers' index showed yesterday.

THE manufacturing sector grew last month for the first time in over a year, a purchasing managers' index showed yesterday.

The index (PMI) rose to a seasonally adjusted 50,3 points in November from 47,6 in October, breaking above the 50 mark that divides contraction from growth for the first time since April last year and trailing the global PMI which returned to growth several months ago.

"November saw the fourth consecutive gain for the PMI and ended a run of 18 months of below 50 index-point readings," head of fixed income at PMI sponsor Kagiso Securities André Coetzee said yesterday.

"In the history of the PMI (since 1999), this has by far been the longest, and most severe, decline for the South African factory sector."

Official data last week showed a rebound in manufacturing helped the economy pull out of recession in the third quarter.

The sector grew 7,6percent compared with the previous quarter after collapsing on a global downturn.

The PMI showed manufacturers were slightly less optimistic about the outlook, with the expected business conditions index falling again to 65,0 from 67,9 in October after rising for seven straight months to September.

A separate survey conducted by FNB and the Bureau for Economic Research (BER) showed consumer confidence increased further to +6 in the fourth quarter from +1 previously. FNB and the BER said a greater majority of consumers "feel positive about the economy's outlook and about their own finances these next 12 months". - Reuters

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