Manufacturers remained cautious about the outlook, with respondents expecting business conditions to deteriorate in the first quarter of 2012 and to remain weak by this time next year.
BER economist Nkanyiso Hlongwa stressed, however, that the relatively low confidence index hid improvements in business conditions, particularly in demand conditions, which strengthened notably. "The better-than-expected improvements in the domestic sales and order volume indicators signalled continuing local demand for domestically manufactured goods," Hlongwa said, adding that the reading for domestic order volumes rose to a four-year high, while domestic sales volumes also increased markedly.
Export market conditions also improved, Engineering News reports, with export sales and order volumes rising to their first positive reading since the first quarter of 2003. "The weaker rand exchange rate may have provided a boost to export conditions as it helped make South African products more attractive to international buyers," Hlongwa said. Shortages of structured steel products and liquefied petroleum gas might have added to the lack of satisfaction regarding the prevailing business conditions, he concluded.
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