The purchasing manager’s index (PMI) is often used as an indicator of the health of the manufacturing sector. Its recent rise has caused certain experts to suggest that the manufacturing sector is recovering from the recession.

Experts do however remain cautious about predicting any massive improvement in job creation or output.

Kagiso Securities reported that the PMI rose for the fifth consecutive month in December, rising to 52.5 from 50.3 in November. The report was drawn up by the Bureau for Economic Research and the Institute of Purchasing and Supply South Africa.

Sanlam Investment Management economist Arthur Kamp noted that 50 points was seen as the dividing line between growth and shrinking.

Another positive indication of recovery was the new sales orders that were up to 54.7 in December from 54.4 in November. "This does point to growth in the sector and gives some indication for growth in the months ahead."

Reported by Business Report