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Business conditions in South Africa show slower improvement in April

Staff Writer |
Business conditions in the South African private sector continued to improve during April, as signalled by the latest PMI data from Standard Bank and IHS Markit.

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Supporting the overall improvement was an increase in new orders, which rose for the third month in succession.

Furthermore, workforce numbers continued to grow in response to planned business expansions.

However, a combination of factors, including the listeria outbreak, caused output to slip into contraction territory, which in turn led to a softer overall pace of improvement in the sector.

Meanwhile, inflationary pressures built during April, with higher cost burdens fuelling stronger output price inflation.

The headline Standard Bank PMI is a composite singlefigure indicator of changes in private sector business conditions.

It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

Any figure greater than 50.0 indicates overall improvement in conditions.

The latest PMI figure posted 50.4, down from 51.1 in March.

Though the headline reading signalled a sustained improvement in the health of the South African private sector, the rate of growth was only marginal.

A further increase in new orders formed the basis for growth, with firms winning new business at a faster pace.


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