South Africa PMI May 2021

South Africa

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.

FocusEconomics Consensus Forecast panelists see fixed investment growing 1.8% in 2021, which is unchanged from last month’s forecast. For 2022, the panel sees fixed investment expanding 3.9%.

Author:, Economist

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South Africa PMI Chart

South Africa PMI May 2021 0

Note: IHS Markit Manufacturing Purchasing Managers’ Index (PMI). Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit.

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