Going up?

The seasonally adjusted Investec Purchasing Managers Index (PMI) continued its increase in March, rising by 2.5 index points to 51.5 and pushing the index just above the critical level of 50.

The slight depreciation of the rand during March seems to have impacted positively on both the export performance of manufacturers as well as the degree of import competition.

This is a positive development. However, compared to other sectors of the South African economy (excluding mining), where both activity and confidence are at high levels, the manufacturing sector is clearly still under pressure, said Andr Roux, head of fixed income at Investec Asset Management.

The seasonally adjusted PMI price index increased to 64 from 61 in February. This is in line with the strong demand conditions as well as the slight deprecation of the rand during March, and also the relatively high PPI inflation rate. Nonetheless, price pressures are still moderate, Roux said.