South Africa: PMI inches up in August, but remains in contraction territory
September 5, 2015
The Standard Bank Purchasing Managers’ Index (PMI) inched up from 48.9 in July to 49.3 in August, thus reaching a three-month high. Despite the increase, the index remains below the 50-threshold, which separates expanding from contracting conditions in business activity.
August’s improvement mainly reflected rising employment compared to the precious month, which helped the companies to reduce their backlogs. Nevertheless, output and new orders in August dropped at the strongest rate in a year. As a result, demand and activity indices remained weak. Analysts added that, “currently, the private sector is in recession and signals from the PMI’s leading indicator suggest ongoing deterioration, with the ratio remaining below 1 for a third consecutive month.”
Author: Dirina Mançellari, Senior Economist