South Africa PMI March 2018

South Africa

South Africa: PMI points to second consecutive expansion in March

April 5, 2018

The Standard Bank Purchasing Managers’ Index (PMI) inched down from 51.1 points in February to 51.0 points in March. It therefore again came in above the six-year long-run survey average of 50.7 points and recorded the second expansion since July 2017.

March’s print was driven by a slower expansion in output and new orders. Growth in these two components was constrained by a decline in foreign sales, weighed down by a weak economic environment. Nevertheless, private sector businesses increased staffing in March to expand current operating capacities. Regarding price developments, output prices rose because of higher input costs, which were driven by higher fuel costs, rising salaries and unfavorable exchange rates.

Commenting on March’s figure, Economist Thanda Sithole at Standard Bank said:

“The economy-wide PMI should continue to reflect signs of improving domestic business conditions over the near term. This is premised on the improved political landscape alongside positive interventions in State Owned Enterprises to restore good governance, cabinet renewal in key government positions and recently the Moody’s decision to preserve SA’s investment grade rating and change the rating outlook from negative to stable. The recent 25bps interest rate cut by the SARB should provide further impetus to domestic demand.”

South Africa Investment Forecast


FocusEconomics Consensus Forecast panelists see investment expanding 0.9% in 2018, which is unchanged from last month’s estimate. For 2019, the panel expects investment to increase 2.1%.


Author: Jean-Philippe Pourcelot, Economist

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South Africa PMI Chart


South Africa PMI March 2018 0

Note: Standard Bank Purchasing Managers’ Index. Readings above 50 indicate an improvement in business conditions while readings below 50 point to a deterioration.
Source: Standard Bank


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