South Africa

South Africa PMI March 2021

South Africa: PMI rises marginally in March

The South Africa IHS Markit Purchasing Managers’ Index (PMI) ticked up to 50.3 in March, from February’s 50.2. Consequently, the index remained somewhat above the critical 50-threshold, pointing to only a marginal improvement in business conditions from the previous month.

March’s reading largely reflected softer output growth compared to the prior months’ growth amid lower client demand and constraints to input supplies. Moreover, new orders contracted at the fastest rate since November last year, chiefly owing to falling new client sales and export demand. Meanwhile, employment continued to fall in March amid firms’ efforts to lower costs and weak capacity pressure. On the price front, input cost inflation rose at the quickest pace since October 2018 due to soaring purchase prices, while output charges increased more modestly. Lastly, although still remaining optimistic, firms’ expectations for output in the coming twelve months weakened somewhat compared to the previous month’s high.

Commenting on the outlook for the South African private sector, David Owen, economist at IHS Markit, noted:

“Additional supply concerns may constrain activity further in the coming months, before the global COVID-19 vaccine roll-out can restore business confidence and global demand later in the year.”

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