{"id":765015,"date":"2024-04-02T12:11:05","date_gmt":"2024-04-02T10:11:05","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=765015"},"modified":"2024-04-02T12:11:14","modified_gmt":"2024-04-02T10:11:14","slug":"south-africas-big-three-problem-progress-being-made","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/765015\/south-africas-big-three-problem-progress-being-made\/","title":{"rendered":"South Africa’s ‘big three’ problem – progress being made"},"content":{"rendered":"\n

Sentiment within South Africa’s manufacturing sector has taken a step back, but there is a silver lining coming from the logistics sector. <\/p>\n\n\n\n

The latest seasonally adjusted Absa Purchasing Managers\u2019 Index (PMI) dropped from 51.7 in February to 49.2 in March – below the neutral level of 50. <\/p>\n\n\n\n

“The PMI has been choppy in recent months, but the average for the first quarter of this year is equal to the final quarter of last year,” Absa said. <\/p>\n\n\n\n

“In the fourth quarter, the gross value added by the sector managed to eke out a 0.2% quarter-on-quarter expansion, with a more robust annual increase. The PMI generally suggests a similar experience is possible in the first quarter.”<\/p>\n\n\n

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After strong improvements in February, the business activity and new sales orders index dropped in March, with respondents suggesting that demand conditions were sluggish. <\/p>\n\n\n\n

In more positive news, the supplier deliveries index dropped significantly, from 62 to 54.1. <\/p>\n\n\n\n

“The reason for this being potentially positive news is that it could be one of the first signs that congestion at the local ports is easing somewhat,<\/strong> and deliveries of (imported) supplies are now coming through faster.” <\/p>\n\n\n\n

The index is inverted, meaning that faster deliveries result in a decline in the index. <\/p>\n\n\n\n

“This is because faster deliveries during times of uncongested and unconstrained supply chains are generally seen as a negative for the sector as it means suppliers are less busy (due to less demand from other clients), and thus, goods are able to get to the respondent faster.”<\/p>\n\n\n\n

Although this could have played a role in March, given that demand for manufactured goods dropped, commentary from respondents suggested that better-working supply chains are a key reason for improving delivery times. <\/p>\n\n\n\n

This could eventually also lift the inventories for intermediate goods and raw materials, which saw a decline in March. <\/p>\n\n\n\n

Logistics, along with electricity, crime, and corruption, is one of the key areas identified by the government and the private sector as needing to be improved to boost the economy. <\/p>\n\n\n\n

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