Johannesburg - Manufacturing business conditions took a turn for the better
during the third quarter, the Bureau of Economic Research (BER)
said on Monday.
The BER's latest manufacturing survey showed a notable
improvement in manufacturing business confidence; albeit that it
remained at low levels.
The business confidence index came in at 22 - up from 11 index
"The survey shows a modest yet clear change of trends when
compared to the first and second quarter results," BER economist
Christelle Grobler said in a statement.
"While manufacturing activity is still under pressure, the
results confirm that the worst is behind us."
Domestic sales volume indicators remained in negative territory,
but the rate of decline surprised on the upside by moderating
"The largest improvement was in the basic metals sub-sector
which saw a turnaround from a net majority reporting declining
local sales volumes previously, to a reading of zero in the current
Foreign demand conditions also appeared to be improving,
supporting the notion of the beginning of a global recovery.
In line with the slightly stronger local and international
demand, the pace of contraction in production volumes slowed.
"The most significant change once again took place in the basic
metals sub-sector, with respondents in this category actually
reporting an increase in production volumes."
This result corresponded with the latest manufacturing
production data released by Statistics SA last Thursday, showing an
increase of 3.3% between June and July 2009 (seasonally
adjusted), and mirrored the trends in the August Kagiso PMI, she
"Furthermore, manufacturing employment trends have taken a turn
for the better during the third quarter. Labour forces are
shrinking at a slower rate than before and the average hours worked
per factory worker have recovered somewhat."
On the other hand, the rate of increase in average labour costs
per unit of production rose faster than expected - probably as a
result of high wage increases granted nationwide.
General business conditions seemed to be improving gradually,
and respondents had not been this positive regarding expected
business conditions in 12 months' time since the last quarter of