South Africa: Private-sector conditions deteriorate at steeper pace in April
The S&P Global Purchasing Managers’ index (PMI) ticked down to a three-month low of 49.6 in April from March’s 49.7. As such, the index moved further below the 50.0 no-change mark, signaling a steeper deterioration in private-sector operating conditions from the previous month.
Load shedding remained the main driver of April’s downturn. marginal downtick in the index chiefly reflected employment levels dropping at the sharpest pace since February 2022. This was the result of output dropping for a seventh consecutive month, although the contraction was softer than March’s. More positively, new orders rose marginally in April, effectively ending a four-month streak of contractions. The expansion in new business was driven by stronger external demand, as export orders rose robustly. The improvement was mostly recorded in the services sector, while the performance of the industrial, wholesale and retail, and construction sectors dampened overall activity.,
Turning to prices, input cost inflation cooled to a three-month low. Elevated material, fuel and electricity prices continued to drive price pressures, however. These costs were passed on to customers, but similarly to input costs, output charge inflation receded marginally from March’s eight-month high. Lastly, firms remained confident regarding the outlook for the coming year; that said, sentiment dropped for a sixth consecutive month due to concerns over high inflation and fragile economic conditions.