Manufacturing figures improve as lockdown eases

Conditions in the manufacturing sector reached a multi-year high in June, as the economy went into level 3 lockdown with fewer restrictions, allowing more businesses to open up.

The PMI — released in conjunction with Stellenbosch University’s Bureau for Economic Research — rose to 53.9 points in June, up from May’s 50.2, pointing to a continued monthly recovery after April, when sub-components for business activity and new sales orders hit historic lows. The monthly gauge gives insight about conditions in the sector, which accounts for about 13% of GDP. A reading below 50 indicates a contraction in activity, while a reading above 50 indicates expansion.

The sub-component measuring supplier performance — which moves inversely to the headline index and has been providing an artificial boost to the overall number in recent months — declined to 61.9 points in June. Though it probably still left the PMI elevated, the decline is encouraging and suggests supply chains are starting to function better, Lings said.

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