The private sector showed signs of stabilisation in April, emerging from a four-month downturn as sales picked up slightly and supply chains strengthened, a survey showed on Tuesday.
The S&P Global South Africa Purchasing Managers' Index (PMI) rose to 50.0 in April, up from 48.3 in March. A PMI reading above 50 indicates growth, while below 50 points to a contraction.
This marks the first time since November 2024 that the index has reached the neutral mark, signalling a mild recovery in business conditions.
New orders, output and employment all moved into growth territory, albeit at a modest pace. New orders increased for the first time in five months, driven by larger client orders and successful marketing campaigns, though economic uncertainty continued to weigh on customer spending.
Supply chains improved notably, with suppliers' delivery times shortening for the first time since June 2023, aided by eased port congestion at Durban. This led to a modest rise in purchasing activity, the first in four months, as firms sought to replenish their inventories.
However, input price pressures intensified sharply, reaching an eight-month high, largely due to a weakening rand against the US dollar.
"Volatility in the rand, specially during the first half of April, made its mark on prices," said David Owen, senior economist at S&P Global Market Intelligence.
Owen said despite the better trends in activity, optimism for the year ahead dipped, with firms expressing concerns over domestic and international politics.
SA business activity stabilises as PMI hits neutral mark
Image: Reuters
The private sector showed signs of stabilisation in April, emerging from a four-month downturn as sales picked up slightly and supply chains strengthened, a survey showed on Tuesday.
The S&P Global South Africa Purchasing Managers' Index (PMI) rose to 50.0 in April, up from 48.3 in March. A PMI reading above 50 indicates growth, while below 50 points to a contraction.
This marks the first time since November 2024 that the index has reached the neutral mark, signalling a mild recovery in business conditions.
New orders, output and employment all moved into growth territory, albeit at a modest pace. New orders increased for the first time in five months, driven by larger client orders and successful marketing campaigns, though economic uncertainty continued to weigh on customer spending.
Supply chains improved notably, with suppliers' delivery times shortening for the first time since June 2023, aided by eased port congestion at Durban. This led to a modest rise in purchasing activity, the first in four months, as firms sought to replenish their inventories.
However, input price pressures intensified sharply, reaching an eight-month high, largely due to a weakening rand against the US dollar.
"Volatility in the rand, specially during the first half of April, made its mark on prices," said David Owen, senior economist at S&P Global Market Intelligence.
Owen said despite the better trends in activity, optimism for the year ahead dipped, with firms expressing concerns over domestic and international politics.
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