South Africa PMI July 2016

South Africa

PMI improves marginally in July but remains in contractionary territory

The Standard Bank Purchasing Managers’ Index (PMI) increased to 49.90 in July from 49.60 in June. Despite the slight increase, the index remains below the 50-threshold, which separates contracting from expanding conditions in business activity.

July’s slight increase came on the back of a marginal improvement in the employment and inventory indices. However, economic conditions remain challenging and companies reported falling activity for the fifteenth consecutive month in July. Moreover, overall new businesses declined and new orders deteriorated in July amid lower demand from export markets. Analysts added that, “in response to subdued demand, some businesses lowered their input buying activity in July. The rate of reduction was moderate, although slightly stronger than that seen in June. Nonetheless, pre-production inventories accumulated for the second month in a row.”

FocusEconomics Consensus Forecast panelists see investment falling 0.6% in 2016, which is down 0.7 percentage points from the previous month’s estimate. For 2017, the panel expects investment to increase 1.6%.

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South Africa PMI Chart

SouthAfrica PMI July 2016 0

Note: Standard Bank Purchasing Managers’ Index. Readings above 50 indicate an improvement in business conditions while readings below 50 point to a deterioration.
Source: Standard Bank

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