South Africa: PMI in September plummets to lowest level in over a year
October 6, 2015
The Standard Bank Purchasing Managers’ Index (PMI) fell from 49.30 in August to 47.90 in September, thus dropping to the lowest level in over a year. As a result, the index remains below the 50-threshold, which separates expanding from contracting conditions in business activity.
September’s decrease mainly reflected deteriorating conditions in the labor market, with unemployment dropping for the first time in four months. Moreover, new orders and manufacturing output recorded steeper contractions compared to the previous month. In addition, cost inflation remained elevated despite decreasing slightly over August. Analysts added that, “looking ahead, signals from the PMI’s leading indicator continue to suggest ongoing deterioration, with the ratio of new orders to inventory falling further in September and remaining below 1 for a fourth consecutive month.”
Author: Dirina Mançellari, Senior Economist