South Africa: Deterioration in business conditions softens in August
September 4, 2019
In August, the IHS Markit Purchasing Managers’ Index (PMI) regained lost ground in August, climbing to 49.7 from 48.4 in July. The index, thus, moved closer to the critical 50-point threshold, signaling the contraction in private-sector activity eased.
August’s print reflected a softer fall in output and new orders; a marginal upturn in orders from overseas markets helped dampen the decline in new business. Meanwhile, employment levels stabilized: While some firms reduced their payroll numbers, others hired more workers in anticipation of higher future output. Higher fuel prices and a weaker rand lifted input costs, although overall input cost inflation decelerated for the fourth consecutive month. Firms raised their output prices in turn. Lastly, the outlook on future production was only mildly optimistic, with weaker economic conditions weighing on output projections.