South African PMI – “green shoots”?

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By Mokgatla Madisha, Investec Asset Management.

The seasonally adjusted Investec PMI declined marginally from the record lows set in March to 35.6 index points in April.

While the seasonally adjusted business activity index has seen a slight uptick to 32.8 from 31.2 previously, it remains very low. A similarly increase in the seasonally adjusted new sales orders index from 32.6 to 33.7 points to a moderation in the rate of decline.

The backlog of sales orders index reached another record low of 20.5. The seasonally adjusted inventories index shows a much faster pace of decline, declining to 28.7 in April. The purchasing commitments index also fell to a record low of 29.9. Unsurprisingly, weak demand has impacted the labour market with the seasonally adjusted employment index dropping to a record low of 36.2.

The expected business conditions index, aimed at capturing purchasing managers medium term outlook, has witnessed a further increased to 48.3 points, suggesting that the poor near-term conditions could see some improvement towards the latter part of the year. This is broadly consistent with similar global surveys.

Investec Purchasing Managers Index

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