South Africa: PMI picks up in April
May 11, 2016
The Standard Bank Purchasing Managers’ Index (PMI) increased from 47.0 in March to 47.9 in April. March’s result had tallied the lowest level since July 2014. As a result of the increase, the index is now closer to the 50-threshold, which separates expanding from contracting conditions in business activity. The index has been under the threshold since June 2015.
April’s improvement came on the back of a slower pace of deterioration in business conditions. Nevertheless, output and new order dropped again in April. Analysts added that; “output has been in contraction for 12 consecutive months and companies’ intentions to downscale are evident from the employment index falling to its lowest recorded level since the inception of the series. This could be due to a combination of both wage increases (which rose at a faster pace) as well as declining demand, with the New Orders Index remaining in contraction for a fifth consecutive month. Input as well as output prices inflated more in April as some companies passed on higher costs to consumers.”
Author: Dirina Mançellari, Senior Economist