South Africa: PMI improves in June, but conditions continue to deteriorate
The S&P Global Purchasing Managers’ Index (PMI) rose to 48.7 in June, up from May’s 47.9. Despite the uptick, the index remained below the 50.0 no-change threshold—where it has been for the past four months—signaling a milder deterioration in private sector operating conditions compared to the previous month.
June’s mild improvement reflected new orders declining at a more moderate pace than in the prior month; falling domestic and international demand continued to weigh on sales. As such, output fell once again in June, although the rate of decline was softer than in May, as load shedding was reduced. Better power supply conditions also allowed for an improvement in vendor performance, which in turn positively affected prices. Input costs rose at the softest rate in five months—partly due to a more favorable exchange rate—and selling price growth slowed marginally from the previous month. In further positive news, employment levels rose slightly. Lastly, firms’ sentiment increased to a seven-month high, supported by expectations of softer inflation and reduced load shedding ahead.