JOHANNESBURG: The latest Purchasing Managers Index paints an encouraging start to the third quarter of the year, but shows there are several weak spots in the economy that will present a challenging short-term ahead.
The Barclays Africa and Bureau for Economic Research PMI is seen as an important indicator of economic trends. The index, which has been adjusted for seasonality, came in flat in July at 51.4 points. this follows a strong gain in May – off very depressed levels – and a further rise in June.
Barclays Africa economist Miyelani Maluleke says, on the surface this is not a great figure, but it is positive considering the challenges the sector has been facing in terms of the economic environment and electricity shortages. The index also notes business activity and inventories are higher, which is positive. Maluleke says business activity, at 53.2 index points, is now at its highest level since the start of January. Of the key PMI subcomponents, the inventories index recorded the biggest gain in July. The index rose by 3.4 points to 60.2.
