The Absa Purchasing Managers’ Index rose to 58.6 in February from 57.1 in January, when it gained three points compared to December. A rising PMI suggests that confidence is returning to South Africa’s vital manufacturing sector, though the road to recovery remains strewn with potholes.
This includes the employment sub-index, which edged up to 50.7 from 49.2. This puts it back into marginally positive territory as 50 is the neutral level. In December, it had plunged more than eight points to 42.4. So employment levels in manufacturing are hopefully holding steady, though there are no signs of significant job creation in the sector. A fuller picture will be provided when Statistics South Africa publishes the results of the delayed Quarterly Labour Force Survey for the fourth quarter of 2021. The Q3 survey revealed a record unemployment rate of 34.9%, a signal that the overall rebound in economic activity from the 2020 Covid collapse was not translating into new jobs.
And there are plenty of headwinds that could sour the manufacturing outlook for 2022 after a cautiously promising start.