South Africa: PMI signals deteriorating business conditions in January
February 4, 2015
The HSBC Purchasing Managers’ Index (PMI) inched down from 50.20 in December to 49.80 in January. The figure marked a six-month low. As a result of the monthly drop, the index fell below the 50-threshold for the first time since July 2014, indicating a deterioration in business conditions.
January’s deterioration came on the back of further declines in manufacturing output and new orders. According to HSBC, “backlogs of work continued to fall, signaling increases is spare capacity, while the deterioration in export orders, after a period of sustained growth, suggests external demand is unlikely to compensate for weak domestic demand conditions.”
Author: Dirina Mançellari, Senior Economist