South Africa: PMI drops to contracting territory in June
July 3, 2015
The Standard Bank Purchasing Managers’ Index (PMI) fell from 50.1 in May to 49.2 in June, thus dropping to the lowest level since July last year. As a result, the index dropped just below the 50-threshold, which separates expanding from contracting conditions in business activity.
June’s deterioration came on the back of a decrease in manufacturing output, mainly due to power outages and a lack of demand. In addition, new orders fell at the steepest pace in nearly a year. Moreover, Standard Bank added that, “the growth outlook for South Africa remains lacklustre as a combination of declining order intakes and falling purchasing activity suggests that the sector is likely to remain stuck in reverse gear, at least in the short term.”
Author: Dirina Mançellari, Senior Economist