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Johannesburg - The Kagiso Purchasing Managers Index (PMI) - a key measure of manufacturing activity - suffered a setback in September as the index declined below the 50 mark to 48.4.
Releasing the index on Friday, Kagiso said the September decline helped to push the average PMI down to 49.4 index points during the third quarter of 2010 compared to 51.6 in the second quarter of the year.
"A worrying development in September was that all five of the sub-indices used to calculate the overall PMI lost ground," Kasigo spokesperson, Theo Vorster said.
By far the biggest decline was for the suppliers' performance index, which shed 5.9 points to 48.7 - the lowest level since February 2010.
"Equally concerning was the further 1.1 point decline for the business activity index to 45.8 index points," Vorster said.
"As was the case in August, strike activity in the vehicle sector may provide part of the explanation for the weak September figure."
Of the five key indices, only new sales orders managed to remain above the 50 level that separated expansion from contraction in September.
However, the index lost 1.8 points to just above 50 at 50.2. After rising robustly above the 50 mark in the early stages of 2010, the PMI employment index posted the fifth consecutive sub-50 reading in September at 48.1.
"Based on these numbers, factory output levels are set to moderate further during the third quarter of 2010 with the manufacturing sector unlikely to see any meaningful job growth in the near term," Vorster said.
Releasing the index on Friday, Kagiso said the September decline helped to push the average PMI down to 49.4 index points during the third quarter of 2010 compared to 51.6 in the second quarter of the year.
"A worrying development in September was that all five of the sub-indices used to calculate the overall PMI lost ground," Kasigo spokesperson, Theo Vorster said.
By far the biggest decline was for the suppliers' performance index, which shed 5.9 points to 48.7 - the lowest level since February 2010.
"Equally concerning was the further 1.1 point decline for the business activity index to 45.8 index points," Vorster said.
"As was the case in August, strike activity in the vehicle sector may provide part of the explanation for the weak September figure."
Of the five key indices, only new sales orders managed to remain above the 50 level that separated expansion from contraction in September.
However, the index lost 1.8 points to just above 50 at 50.2. After rising robustly above the 50 mark in the early stages of 2010, the PMI employment index posted the fifth consecutive sub-50 reading in September at 48.1.
"Based on these numbers, factory output levels are set to moderate further during the third quarter of 2010 with the manufacturing sector unlikely to see any meaningful job growth in the near term," Vorster said.
