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Johannesburg - The Kagiso purchasing managers index (PMI), a gauge of the manufacturing sector's health, held stable at a fairly high level in April, the Kagiso Group said on Tuesday.
It held at 56.4 in April, which was only marginally lower than the 13-month peak of 57.2 index points reached in March.
"Both the current activity and forward looking indicators remained robust, suggesting that the improved growth momentum in the factory sector during 2011 first quarter was sustained in the early stages of the second quarter," said Theo Vorster, specialist consultant at Kagiso Trust Investments.
"Although the business activity and new sales orders indices declined slightly, at 58.4 and 61.1 index points respectively, the level of the indices indicates both robust manufacturing production and lively demand for factory goods."
Vorster said it was disappointing that the improved activity levels were not leading to more jobs.
"The PMI employment index rose by 2.1 points to 49 index points, but remained below the key 50 mark that separates job growth from retrenchment.
"Besides rising above the 50 level for one month in February 2011, the PMI employment index has remained below the key 50 level since May 2010," he said.
Input costs eased to just below 83 index points from 88 previously.
"On a more positive note, input cost pressure eased somewhat, but at just below 83 index points, the PMI price index remained at a level indicative of fast rising producer prices."
Vorster said the index measuring expected business conditions remained stable at 58.1, after having declined in the previous two months.
The PMI is based on a survey conducted monthly by the Bureau for Economic Research at the University of Stellenbosch and the Chartered Institute of Purchasing and Supply.
It held at 56.4 in April, which was only marginally lower than the 13-month peak of 57.2 index points reached in March.
"Both the current activity and forward looking indicators remained robust, suggesting that the improved growth momentum in the factory sector during 2011 first quarter was sustained in the early stages of the second quarter," said Theo Vorster, specialist consultant at Kagiso Trust Investments.
"Although the business activity and new sales orders indices declined slightly, at 58.4 and 61.1 index points respectively, the level of the indices indicates both robust manufacturing production and lively demand for factory goods."
Vorster said it was disappointing that the improved activity levels were not leading to more jobs.
"The PMI employment index rose by 2.1 points to 49 index points, but remained below the key 50 mark that separates job growth from retrenchment.
"Besides rising above the 50 level for one month in February 2011, the PMI employment index has remained below the key 50 level since May 2010," he said.
Input costs eased to just below 83 index points from 88 previously.
"On a more positive note, input cost pressure eased somewhat, but at just below 83 index points, the PMI price index remained at a level indicative of fast rising producer prices."
Vorster said the index measuring expected business conditions remained stable at 58.1, after having declined in the previous two months.
The PMI is based on a survey conducted monthly by the Bureau for Economic Research at the University of Stellenbosch and the Chartered Institute of Purchasing and Supply.
