Johannesburg - Factory orders in December fell marginally but remained in positive territory, a leading survey showed on Monday.
The seasonally adjusted Kagiso Purchasing Managers' Index (PMI) fell slightly to 51.7 in December from 52.9 in November.
The PMI is done monthly by the Bureau for Economic Research and the Chartered Institute of Purchasing and Supply and is a key indicator for activity in the manufacturing sector.
It was recorded at 48.6 in September and 49.8 in October. An index level of below 50 represents contraction in the manufacturing sector while a reading of above 50 shows expansion.
Theo Vorster, a specialist consultant from the Kagiso Group said despite the decline, the PMI remained in positive territory during December.
The business activity index of the PMI remained largely unchanged at 54.5 in December.
Vorster said the unadjusted index for business activity declined to 57.4 in December from 62.8, which reflected the slowdown in factory activity over the festive season.
New sales orders declined after their 5-index point improvement in November. New sales orders declined by 3.3 points, but remained in positive territory at 53.2.
The business activity and new sales orders account for 55% of the headline PMI.
Employment prospects in the manufacturing sector are discouraging.
"The PMI employment index remained stuck below the critical 50 index point level for the eighth consecutive month with the index falling by 2.6 points to 45," Vorster said.
Purchasing managers remained fairly upbeat regarding future prospects, according to Vorster.
The index for expected business conditions remained above the 60 mark, although it lost some ground from 64.6 during November to 62.5 in December.