South Africa

South Africa PMI October 2021

South Africa: PMI drops to three-month low in October; conditions deteriorate

The IHS Markit Purchasing Managers’ Index (PMI) fell below the neutral 50-threshold in October, dropping to a three-month low of 48.6 from September’s three-month high of 50.7, signaling a deterioration in business operating conditions compared to the prior month.

October’s decay was largely due to a sharp output decline as strikes in the metal industry and ongoing material shortages dragged on production. Additionally, new orders declined at the quickest rate since July, weighed on by a strong drop in exports. Consequently, staffing levels decreased in October as activity slowed. Turning to prices, input cost inflation accelerated due to higher prices for raw materials, fuel and transport, as well as a stronger U.S. dollar. In turn, firms increased output prices, although at a less pronounced rate in a bid to promote sales with promotions. Lastly, sentiment regarding future output dropped in October as some firms worried that continued supply disruptions and persistent high price pressures could hamper activity ahead.

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