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Economy down, Statistics up
New statistics have been released. The economy may be crashing but statistics are booming.
This time it is the Purchasing Managers Index (PMI). And it is down, down harder and lower since these stats were first recorded in 1999.
The PMI tracks what we can expect our factories output to grow or contract by. The median is 50, which means we are steady state and neither growing nor slowing.
But.
PMI fell to 39.5. Bloomberg posted an explanation of what is going on and they also have a nifty graph. This story was carried by numerous publications today.
The Mail and Guardian took the view that the fall was a clear indication that the Monetary Policy Committee (MPC) should start cutting interest rates, even as quickly as next week.
The expectations component fell even further to 29.9. This might mean that fear is the motivator rather than cold hard production figures, but then when the two major motivators of economic activity are fear and greed, this can be a pretty compelling factor. The greed is gone for a while and we can expect a whole lot of fear in its place.
Business Day put it that 'Factories hit historic low as recession bites'. Justmoney would like to state that we are not in a recession, it's close, real close, but we are not in recession.
However the fear of recession will cause purchasing managers to take fewer risks and could actually force us down into recession by being too cautious. There are many countries that are in recession and while we are not one of them their PMI's are showing similar patterns to ours. The pessimists amongst us could say that we are heading that way already, but we have a lot less risk exposure to the banking meltdown. It was also stated that the PMI authors did not expect it to rebound until the second quarter of next year.
Business Report looked at the global manufacturing slowdown which our PMI seems to reflect. Business Report also tells us that the USA is in recession. The Huffington Post put it the best, just go check their screaming red headline out. The BBC reports that the US recession started a year ago already.
In other news the Mail and Guardian reports that Trevor Manuel is going to reveal his budget early, on February 11th next year.
It is expected that this will signal an early election being called. A lot of the current politico-economic policy debates will be resolved by this budget, making it one of the most difficult ever prepared by Manuel. iAfrica also carried this SAPA story.
Finally tributes to Nthato Motlana, known as the father of BEE have poured in following his death after a long struggle with cancer.
The Business Times ran a tribute to him, but perhaps one of the largest legacies that he leaves is this report from Business Day that a 'Quarter of senior manager jobs held by blacks'. From zero to 25% in less than 15 years, let's hope that it doesn't take 15 more to be in a position of real parity.