South Africa: Business conditions stable in May
In May, the Standard Bank Purchasing Managers’ Index (PMI) edged down a further 0.4 points to 50.0 points, falling below the survey’s long-run average of 50.7 points and signaling no improvement in business conditions from a month earlier. May’s reading pointed to the end of a three-month period of expansion for the private sector—the longest streak of growth in more than a year.
Dragging on the overall result was a contraction in output, which suffered from weaker market conditions and product shortages. That said, there were signs for optimism; new orders and employment continued to rise, albeit more slowly than in April. Supplier delivery times also grew, but vendor performance was roughly unchanged. Input cost inflation eased slightly from a month earlier despite recent VAT hikes, in line with output cost inflation.