From the US through China to South Africa, January manufacturing activity gauges – arguably the most timeous and eagerly watched manufacturing sector indicators – have all been encouraging despite undershooting expectations in various respects.
In the US, the January Institute of Supply Management headline manufacturing index slipped to 58.7 from 60.5, lower than the expected 60. According to the UBS CIO Investor Sentiment Survey, investors who were polled expressed confidence in the US economy, an attitude premised on the belief that society will return to “normal”.
Apparently, more than a third of the respondents planned to hire in the next year, while half intend to maintain current workforces. UBS points out that almost half plan to invest more in their businesses, which they interpret as a reflection of their growing optimism in the economy. Meanwhile, Nedbank believed business optimism was underpinned by expectations of a strengthening global economy and thus increased export orders, which slid back slightly in the January PMI.