South Africa’s purchasing managers’ index (PMI) rose for the first time in five months in July but stayed below the 50 break-even level, showing the key manufacturing sector is still struggling after the economy contracted last year.
The survey, conducted by the Bureau for Economic Research (BER) and sponsored by Kagiso Securities, showed on Monday that PMI ticked up slightly to a seasonally adjusted 49,5 in July after falling to 48,4 in June.
The PMI data is a key leading indicator for official data for manufacturing, one of the biggest contributors to the economy and which fell sharply due to depressed domestic and global demand in 2009, when South Africa suffered its first recession in nearly two decades.
“While the July PMI points to some consolidation following a fairly steep decline from the high reached in February, the level of the index suggests that the manufacturing sector slowdown continued at the start of quarter three,” Kagiso and the BER said in a statement.
“A continuation of below-50 PMI readings will indicate a notable loss of momentum in the South African gross domestic product growth recovery.”
The survey showed the PMI employment component rose to 47,6 from 45,9, in what the statement said was a sign the sector was still shedding jobs.
Data from Statistics South Africa last week showed the jobless rate edged up to 25,3% in the second quarter from 25,2% in the first, with jobs lost in manufacturing as well as the private households, transport, construction and agriculture sectors. — Reuters