JOHANNESBURG (Reuters) - South African manufacturing activity increased in September, recovering from the previous month's slump as demand rose and an interest rate cut boosted sentiment, the Absa-sponsored purchasing managers' index survey showed on Tuesday.
Absa's seasonally adjusted PMI for the factory sector rose to 52.8 points in September from 43.6 in August, above the 50-point mark that shows growth.
"Both domestic and export demand showed signs of improvement... On the local consumer front, the recent interest rate cut adds to the expectation of a possible more positive demand story going forward," local bank Absa, which sponsors the survey, said in a statement.
"The positive PMI results suggest that the manufacturing sector is stabilizing after a turbulent period, although challenges remain, particularly in employment," Absa said in a statement.
The 9.2-point jump in the index in September more than made up for the 8.8-point drop in August.
Analysis:
The rise in South African manufacturing activity in September is a positive sign for the economy. The increase in demand and the impact of the interest rate cut have contributed to this growth. As an investor, this could mean potential opportunities in the manufacturing sector. Keep an eye on how this trend continues and consider adjusting your investment strategy accordingly.
