South Africa: PMI drops in May, but still signals solid private sector activity
June 3, 2021
The South Africa IHS Markit Purchasing Managers’ Index (PMI) came in at 53.2 in May, down from April's 53.7, which had marked an over nine-year high. Consequently, the index remained above the 50-threshold, signaling an improvement in business conditions from the previous month.
May’s reading came on the back of robust expansions in output and new orders. Production rose at one of the quickest rates on record, while new business increased for the second month straight. Regarding employment, firms raised staff levels in May and at the fastest clip since November 2012 amid optimism over the recovery in economic conditions due to the vaccine rollout—sentiment among firms remained optimistic in the month. On the price front, input cost inflation rose to the highest in nearly five years due to supply-side issues and higher staff costs. Moreover, output charges increased at the quickest pace in since June 2016 as firms passed on costs to clients.
Author: Hanna Andersson, Economist