South Africa: PMI edges down in November amid weaker demand dynamics
December 3, 2020
The South Africa IHS Markit Purchasing Managers’ Index (PMI) inched down to 50.3 in November from October’s 51.0, which had marked the best reading in over two-and-a-half years. As such, the index was slightly above the critical 50-threshold, separating expansion from contraction in business activity, albeit hinting that momentum is cooling.
November’s reading largely reflected falling output and new orders amid weaker demand and supply chain issues. That said, the rate of job shedding eased in November, marking the slowest drop in employment since March. On the price front, input cost inflation rose at the quickest clip since October 2018, largely owing to commodity shortages, which translated into higher output charges. Lastly, sentiment in the sector rose to a nine-month high in November, as positive news about Covid-19 vaccines raised hopes of a swifter economic recovery in 2021.
Author: Hanna Andersson, Economist