South Africa: PMI rises in August; conditions still deteriorate
September 3, 2021
The IHS Markit Purchasing Managers’ Index (PMI) rose to 49.9 in August from July's 11-month low of 46.1. As such, the index moved closer to, but remained below the 50-threshold, signaling a softer deterioration in business conditions compared to the previous month.
August’s improvement was largely due to the easing of some domestic restrictions, which led to new orders contracting at only a marginal pace, while exports declined at the softest rate in the past three months. Consequently, the fall in output also moderated in August. However, continued raw material shortages and shipping issued prompted longer delivery times and a rise in backlogs. Consequently, purchase prices rose again in August, although at the softest rate this year and output prices also increased at a slower pace. Moreover, firms increases staffing levels for a fourth consecutive month. Lastly, firms became more confident for the first time in four months regarding activity for the coming 12 months.
Author: Marta Casanovas , Junior Economist