South Africa

South Africa PMI May 2024

South Africa: PMI rises again in May

The S&P Global South Africa Purchasing Managers’ Index (PMI) inched up to 50.4 in May from 50.3 in April. As a result, the index moved further above the 50.0 no-change threshold, and signaled a faster improvement in private-sector operating conditions compared to the previous month.

May’s uptick reflected a stabilization in demand; new orders from abroad clocked their first increase in 10 months. Overall, new orders and output declined only marginally, temporarily weighed on by election-related uncertainty leading clients to delay spending decisions. Moreover, employment grew at the quickest pace since September 2022. Lastly, stock building posted the fastest rise in over nine years in anticipation of higher demand. Meanwhile, supply chain conditions showed signs of improvement, with delays at the port of Durban worsening only modestly.

On the topic of prices, May witnessed another sharp increase in input costs driven by higher supplier charges, commodity prices, and transport costs, alongside strong wage growth due to cost-of-living pressures. Consequently, selling prices also saw a sharp increase. Despite these challenges, business sentiment towards the one-year outlook strengthened to its highest since February.

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