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Manufacturing activity recovers but employment still below 50 points - Absa PMI

1 September 2021 7:47 PM
Tags:
Employment
The Money Show
Looting
Bruce Whitfield
Absa
Manufacturing
Riots
Peter Worthington
Absa PMI
Lockdown
Puchasing Managers' Index
business activity

Bruce Whitfield talks to Peter Worthington, Senior Economist at Absa, about the PMI bounce in August.

Absa’s Purchasing Managers’ Index (PMI) rebounded in August after falling to 43.5 points in July.

The PMI, measured monthly to gauge the health of the manufacturing sector, grew to 57.9 points.

The record decline in July followed the unrest and looting in parts of South Africa.

RELATED: Lockdown, riots interrupted economic recovery - Absa

The August recovery was encouraged by a normalisation of demand and output for businesses affected by July’s looting, alongside less strict lockdown restrictions Absa says.

Manufacturing, welder. Picture: Pixabay.com

Is the PMI rebound a sign of improvement or simply a return to normal? Bruce Whitfield asks Absa Senior Economist Peter Worthington,

In July of course we had the unrest and we also had the various lockdown restrictions continuing... so it's not surprising that after the big drop we got in July we should have a big bounce in the PMI coming through in August.

Peter Worthington, Senior Economist - Absa

After stores were ransacked during the July looting, does the restocking of supplies play a big role?

Worthington says this would be one factor, but the figures really represent a return to normal.

I think the question for this PMI data is to see to what extent this apparent big bounce in the August numbers versus July is also reflected in the hard production data when Stats SA eventually publishes.

Peter Worthington, Senior Economist - Absa

When you look at the employment component of the PMI that metric is still sitting below 50, indicating that manufacturers... on balance are experiencing shrinkage in their payrolls.

Peter Worthington, Senior Economist - Absa

Employment is a chronic and acute problem in South Africa. The only answer for it though is going to be stronger growth and maybe some liberalisation of the labour markets...

Peter Worthington, Senior Economist - Absa

For more detail, listen to the audio clip below:




1 September 2021 7:47 PM
Tags:
Employment
The Money Show
Looting
Bruce Whitfield
Absa
Manufacturing
Riots
Peter Worthington
Absa PMI
Lockdown
Puchasing Managers' Index
business activity

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