March PMI loses some gains, but remains healthy
The PMI averaged 55.4 during 2012Q1, a strong increase from the 50.5 average recorded in the final quarter of 2011.
“The higher level of the PMI should be consistent with a favourable GDP contribution from the factory sector at the start of 2012,” said Hugo Pienaar of the Bureau of Economic Research, which conducts the survey in conjunction with CIPS Southern Africa.
Just as the seasonally adjusted business activity and new sales orders indices (the largest weighted PMI components) drove the sharp rise in the headline PMI to 57.9 during February, they were also largely responsible for the March pullback.
The business activity index made the largest negative contribution declining 7.4 points to 57.8.
“The index’s March pullback is not surprising in light of the strained manufacturing sector in Europe, which is a key export market for local manufacturers. The Eurozone flash manufacturing PMI declined to a three-month low of 47.7 in March,” said Pienaar.
In light of the problems in the key foreign markets for SA factory sector goods, the high level of the index hints at robust domestic demand.