South Africa PMI August 2017

South Africa

South Africa: PMI signals contraction in economic activity in August

September 5, 2017

Activity in the private sector fell into contractionary territory in August for the second time in 12 months. The Standard Bank Purchasing Managers’ Index (PMI) dropped from July’s 50.1 to a one-year low of 49.8 in August, coming in below the six-year long-run survey average of 50.7. A reading below 50 signals deteriorating domestic business operating conditions.

August’s print reflects a decline in both output and new business. Lower output reflects a decline in new business, which dropped for the fifth consecutive month and posted the steepest decrease since April 2016. Contrasting the decline in these two sub-components, job creation picked up steam in the surveyed month, contributing to a decline in outstanding business. Regarding the latest price trends, the rise in input costs quickened because of higher prices for steel and energy products. Output prices rose as well.

FocusEconomics Consensus Forecast panelists see investment falling 0.4% in 2017, which is down 0.1 percentage points from last month’s estimate. For 2018, the panel expects investment to increase 1.0%, which is down 0.2 percentage points from last month’s forecast.

Author: Jean-Philippe Pourcelot, Economist

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South Africa PMI Chart

South Africa PMI August 2017 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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