South Africa: Conditions improve at strongest pace in over a year in July
The S&P Global Purchasing Managers’ Index (PMI) increased to a 14-month high of 52.7 in July, up from the prior month’s 52.5. Consequently, the index moved further above the 50.0 no-change mark, pointing to a stronger improvement in business conditions from the previous month.
July’s stronger improvement came on the back of new orders expanding at the quickest pace since May 2021, amid stronger client demand and stabilizing market conditions. Additionally, new orders grew for the first time in 14 months. Consequently, firms boosted their activity to meet higher demand, which in turn led to them onboarding more staff to expand their capacity. However, a larger production improvement was constrained by difficulties in sourcing raw materials, delays in deliveries of supplies and disrupted trade routes. In spite of higher prices for fuel, electricity and shipping, the rate of input cost inflation remained largely unchanged from June’s eight-year high in July. Lastly, sentiment rose to a three-month high in July, amid hopes of moderating price pressures and stronger demand.