South Africa PMI June 2016

South Africa

South Africa: PMI drops into contractionary territory in June

July 5, 2016

The Standard Bank Purchasing Managers’ Index (PMI) decreased to 49.60 in June from 50.2 in May, which had marked the best figure since April 2015. As a result of the decrease, the index now lies below the 50-threshold, which separates expanding from contracting conditions in business activity.

June’s deterioration came on the back of challenging economic conditions and slowing market conditions in the country, which led to falling output and employment in June. Moreover, growth in new orders also slowed compared to the previous month. Analysts added that: “the expansionary print in new orders was attributed to a rise in new export orders. Output also remains constrained by higher input costs, particularly purchases costs of raw materials, which some companies passed on to consumers.”

FocusEconomics Consensus Forecast panelists see investment falling 0.6% in 2016, which is down 0.7 percentage points from the previous month’s estimate. For 2017, the panel expects investment to increase 1.6%.

Author:, Senior Economist

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South Africa PMI Chart

SouthAfrica PMI June 2016 0

Note: Standard Bank Purchasing Managers’ Index. Readings above 50 indicate an improvement in business conditions while readings below 50 point to a deterioration.
Source: Standard Bank

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