South Africa: PMI deteriorates in July
August 5, 2015
The Standard Bank Purchasing Managers’ Index (PMI) inched down from 49.2 in June to 48.9 in July, thus dropping to the lowest level in a year. As a result, the index fell further below the 50-threshold, which separates expanding from contracting conditions in business activity.
July’s deterioration mainly reflected decreasing new orders, which contracted for the fourth consecutive month, indicative of subdued demand. In addition, manufacturing output dropped at a sharper rate in July. Nevertheless, encouraging signs of improvement stemmed from the employment component, which increased marginally in July. That said, input cost inflation remained solid, reflecting a faster increase in staff costs.
Author: Dirina Mançellari, Senior Economist