South Africa: PMI increases in February and conditions improve timidly
The S&P Global Purchasing Managers’ index (PMI) rose to a three-month high of 50.5 in February from January’s 48.7. As such, the index broke through the 50.0 no-change mark, signaling an improvement in private-sector operating conditions from the previous month.
February’s improvement was chiefly due to output stabilizing and halting a five-month streak of declines. Additionally, new export orders expanded at the strongest rate since December 2011 amid robust foreign demand. Meanwhile, new order inflows slid at the softest pace in three months in February. Power supply cuts and weak economic conditions continued to weigh on sales. Falling new orders led to yet another drop in business sentiment with regard to the year ahead; business sentiment fell to the lowest level in nine months. This weaker assessment of the outlook prompted firms to shed jobs for the first time in a year.
Turning to prices, a weaker rand against the U.S. dollar contributed to the uptick of purchase cost inflation for the first time in eight months in February. Overall costs rose at the sharpest rate since July 2022. Accordingly, output prices rose at a brisker pace.