South African factory sector expands for second month, Absa PMI shows
2024.11.01 05:32
JOHANNESBURG (Reuters) – South African manufacturing activity grew in October for the second month in a row, a local purchasing managers’ index (PMI) survey showed, the first time since early 2023 that the highly volatile sector has recorded two consecutive months of growth.
The seasonally-adjusted PMI sponsored by South African bank Absa fell to 52.6 points in October from a revised 53.3 in September, staying above the 50-point mark that separates expansion from contraction.
The business activity and new sales orders sub-indices delivered another strong performance, and Absa said there were further positive signs on the horizon.
“Local demand is expected to pick up pace as some benefits from the interest rate cut (by the central bank in September) come through with a lag,” Absa said in a statement.
“Other windfalls, in the form of lower inflation and a boost from withdrawals following the introduction of the two-pot retirement system, could further lift consumer spending,” Absa added.
The “two-pot” pension reform, which from Sept. 1 allowed people to make partial withdrawals from their pension funds before retirement, is expected to spur retail sales and economic growth in the final quarters of the year.
