SEIFSA Encouraged By Uptick In PMI As Lockdown Restrictions Ease

Overall business activity in the manufacturing sector, as captured by the headline ABSA Purchasing Managers’ Index (PMI) for August 2020, provides some level of reassurance to companies in the Metals and Engineering (M&E) sector, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Chief Economist Michael Ade said today.

Dr Ade said the PMI’s performance in August, despite a tough domestic operating environment, provides insight to the improving perception held by company executives, as they aim to further improve on production with the easing of COVID-19 restrictions.

Dr Ade said the leading indicator, which acts as a preview to industrial activity before it happens, is slowly picking up and provides a basis for businesses to use excess capacity, boost production and increase overall contribution to economic growth. Correspondingly, the increase in the PMI is important in influencing how producers and relevant stakeholders in the broader manufacturing sector view the coming month, enabling them to confidently place orders in advance.