Latest news with #PurchasingManagersIndex
Bloomberg
3 days ago
- Business
- Bloomberg
South African Factory Mood Escapes Contraction Despite US Tariffs
A gauge of South African manufacturers' sentiment improved amid a sharp recovery in demand, advancing into expansionary territory for the first time in nine months despite US President Donald Trump's looming tariffs. Absa Group Ltd.'s Purchasing Managers' Index, compiled by the Bureau for Economic Research, rose to 50.8 in July from 48.5 in the prior month, the lender said on Friday. It was the first time since October that the index has pushed above the 50 level that indicates an expansion.
IOL News
4 days ago
- Business
- IOL News
Uncertainty around tariffs as markets digest a raft of economic data
Governor Lesetja Kganyago targets inflation of 3%. Image: SARB/Facebook This week there was significant uncertainty about the implementation of American President Donald Trump's 30% tariff on South African exports and in the end it was delayed by one week to August 7. We also saw a major shift in our inflation targeting regime with the Reserve Bank announcing that future Monetary Policy Committee' (MPC) decisions would be anchored around the lower bound of the 3-6% target band. The indicators to keep an eye on were June PPI numbers, Absa and the Bureau of Economic Research' Purchasing Managers Index, and new vehicle sales data for July. At Thursday's MPC meeting the repo rate was cut by 25 basis points by a unanimous decision. The repo now stands at 7% and the prime lending rate at 10.5%. In their statement the MPC said that the economic outlook is weak despite the uptick of economic activity inthe second quarter. With possible higher US tariffs on South Africa, the MPC's growth projection is revised down from 1.2% to 1%. For the inflation outlook they mention that the rand has strengthened, and inflation expectations have moderated. In June the headline inflation rate was 3% and the core inflation rate 2.9%. Food inflation has risen, mainly due to meat prices and fuel prices are also falling more slowly now, compared to the recent past. The end result is that they expect headline inflation to rise over the next few months, averaging 3.3% for the year, in line with their earlier forecasts. This benign inflation environment was echoed by the June PPI inflation rate. The producer price index (PPI) rose by 0.6% year-on-year, up from 0.1% in May. The increase was primarily driven by higher producer prices for food, beverages and tobacco products. These increased by 4% year on year and contributed 1.2 percentage points to overall producer inflation. The prices for coke, petroleum, chemical, rubber and plastic products declined by 4.7%year-on-year, subtracting 1 percentage point. On a monthly basis, PPI rose by 0.2% in June. As for anchoring future MPC decisions around a 3% inflation rate, Governor Lesetja Kganyago noted that this was not an official National Treasury approved change in the target but rather the preference of the SA Reserve Bank (SARB). It is similar to the move to 4.5%. The June consumer inflation was in line with the preferred rate of 3%; but the SARB expects inflation to pick up over the next few months. Looking ahead, the SARB's Quarterly Projection Model (based on the newly adopted 3% target) suggests five more cuts over the next two years. Absa and the Bureau's PMI d recorded an expansion for the first time in nine months, increasing by 2.3 points to 50.8 in July 2025. It is attributed to an increase in demand with the sub-indices for new sale orders and business activity increased. The index tracking expected business conditions in six months' time declined but is still above the 50-neutral level. New vehicle sales continued growth streak with 51 383 units sold in July, up 6 931 units sold in July 2024. This made for the highest monthly passenger car sales performance since January 2017, driven by car rental sales. Domestic sales of new light commercial vehicles, bakkies and mini-buses also recorded strong gains. Finally, it is unclear if the one-week postponement of the implementation of the 30% US tariff gives South Africa enough time to secure a better deal with the US. Newspapers reported on Friday that the government's contingency plan is an export support desk will serve as a one-stop contact point for exporters, providing real-time updates, guidance on compliance, and support in pivoting to alternative markets. Tax incentives have been mentioned for the motor vehicle and agricultural sectors, but not confirmed by National Treasury. Waldo Krugell is a Professor of Economics, North-West University, Potchefstroom. Image: Supplied Waldo Krugell is a Professor of Economics, North-West University, Potchefstroom. *** The views expressed here do not necessarily represent those of Independent Media or IOL BUSINESS REPORT
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
U.S. Factory Activity Continues to Contract
Factory activity continued to slide backward in July, adding to signs of weakness in the sector despite the wider economy proving resilient. The Institute for Supply Management said Friday that its purchasing managers' index of manufacturing activity contracted to 48 in July from 49 in June. The reading below 50 points to contraction in activity in the sector, though a score above 42.3 on the index generally tallies with expansion in the wider American economy.
Business Times
01-08-2025
- Business
- Business Times
South Korea's factory activity shrinks for 6th month on tariff concerns: PMI
[SEOUL] South Korea's factory activity contracted for the sixth straight month in July, as uncertainty over US tariffs weighed on output and orders, a business survey showed on Friday. The Purchasing Managers Index (PMI) for manufacturers in Asia's fourth-largest economy, released by S&P Global, fell to 48.0 in July, from 48.7 in June. The index has stayed below the 50-mark, which separates expansion from contraction, since February. 'July PMI data signalled that the South Korean manufacturing sector experienced a stronger deterioration in operating conditions,' said Usamah Bhatti, economist at S&P Global Market Intelligence. 'Both production volumes and new orders fell at a steeper rate than that in June, with anecdotal evidence indicating that weakness in the domestic economy was compounded by the impacts of US tariff policy.' The survey was conducted from July 10 to July 23, before South Korea reached on Wednesday a trade deal with the US lowering tariffs to 15 per cent from a threatened 25 per cent. In July, output and new orders fell at steeper rates than the month before, although the decline in new export orders contracted at the mildest rate in four months, sub-indexes showed. Anecdotal evidence pointed to declining export order volumes in the US and Japan in particular, according to the survey. South Korean manufacturers turned pessimistic about the outlook for the year ahead for the first time in three months, citing concerns over the timing of a domestic economic recovery and ongoing uncertainty surrounding US tariff policy. REUTERS
France 24
31-07-2025
- Business
- France 24
China manufacturing sinks again in July as US trade talks stall
The Purchasing Managers' Index -- a key measure of industrial output -- came in at 49.3, the National Bureau of Statistics (NBS) said, down from 49.7 in June and significantly off the 50-point mark separating growth and contraction. A Bloomberg analysts' poll had forecast the index would be the same as in June. "The manufacturing sector's business climate sank lower compared to the previous month," NBS statistician Zhao Qinghe said. The decline was "driven by factors such as the industry's traditional slack period as well as high temperatures, heavy rains and floods in some areas", Zhao said. China has struggled to maintain a strong economic recovery since the pandemic, as it fights a debt crisis in the crucial property sector, chronically low consumption and elevated youth unemployment. A spate of natural disasters has also hit the country this summer, with at least 48 people killed and tens of thousands evacuated this week as northern China endured some of its worst floods in years. "While the statistics bureau partly attributed the decline to weather-related disruptions to production, the breakdown suggests that demand has softened too," Zichun Huang, China economist at Capital Economics, said. "The new export orders index dropped back as high tariffs began to weigh again," Huang added. "More of the current weakness in demand appears to be domestic in nature," she said. China's bruising trade war with the United States -- now on hold pending a deal -- has hit the export-dependent economy. Beijing and Washington called a 90-day truce on the staggeringly high duties in May, and held two days of talks this week aimed at avoiding their reimposition on August 12.
