South Africa PMI July 2016

South Africa

PMI increases but remains in contractionary territory in July

The Standard Bank Purchasing Managers’ Index (PMI) inched up to 49.9 in July from 49.6 in June. Despite the increase, the index still lies below the 50-threshold, which separates expanding from contracting conditions in business activity.

July’s reading marked an improvement from the previous month in both employment and inventories. Output and new orders declined, albeit marginally while delivery times only saw a slight improvement. The general result was a stabilization of business conditions, as the index is virtually in line with 50 mark. Analysts added that, “overall input prices continued to rise, but at a slower rate, driven mainly by purchase costs as the pace of staff cost increases remained sticky. This also saw a moderation in the price increases passed onto consumers.”

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 2

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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