South Africa PMI May 2016

South Africa

South Africa: PMI gains substantial ground in May

June 5, 2016

The Standard Bank Purchasing Managers’ Index (PMI) increased from 47.9 in April to 50.2 in May, which marked the best figure since April 2015. As a result of the increase, the index crossed the 50-threshold, which separates expanding from contracting conditions in business activity. This is the first time that the index rests above the threshold since June 2015.

May’s improvement came on the back of an increase in demand from export markets, which, in turn, supported an improvement in overall new businesses. Moreover, operating conditions in the private sector improved over the previous month. Analysts added that: “The rise in the PMI was driven by new orders on the back of rising external demand as well as new clients and investments, which also had a positive impact on employment during the month. However, challenging economic conditions resulted in actual output remaining in contraction. Output was also negatively impacted by rising input costs despite expanding new orders. Both input and output costs rose during the month.”

FocusEconomics Consensus Forecast panelists see investment rising 2.0% in 2016, which is unchanged from the previous month’s estimate. For 2017, the panel expects industrial production to increase 1.6%.

Author:, Senior Economist

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South Africa PMI Chart

SouthAfrica PMI May 2016 0

Note: Standard Bank Purchasing Managers’ Index. Readings above 50 indicate an improvement in business conditions while readings below 50 point to a deterioration.
Source: Standard Bank

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