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.”
Author: Dirina Mançellari, Senior Economist