South Africa: PMI falls in July; conditions deteriorate at steeper pace
The S&P Global Purchasing Managers’ Index (PMI) dropped to 48.2 in July, down from June’s 48.7. As such, the index moved further below the 50.0 no-change threshold—where it has been for the past five months—signaling a starker deterioration in private sector operating conditions compared to the previous month.
July’s worsening trend chiefly reflected new business inflows declining at the steepest pace in six months. Still-elevated prices have continued to restrain client spending, which, compounded with ongoing load shedding, have dampened demand further. Consequently, firms scaled back output once again—power cuts continued to weigh on production. As a result, outstanding work rose at the fastest rate in 11 months. In turn, firms let go of staff; the rate of job shedding was the steepest since February last year.
Turning to prices, input inflation accelerated, reflecting higher fuel prices, import costs and salaries amid high inflation. As a result, output charges also rose at a brisker pace than in the prior month. Lastly, firms’ sentiment rose to the strongest since October 2022 based on expectations of economic recovery ahead.