South African business activity improved slightly in April, according to the latest Purchasing Manager’s Index by IHS Markit.
The PMI measures private sector business performance. It considers indicators such as new orders, output, employment, stocks of purchases and suppliers’ delivery times. Figures above 50 reflect an improvement.
The index rose from 48.8 in March to 50.3 in April, only the second improvement in business conditions in 10 months.
According to the report, output levels and new orders recorded little change, which translated to only a slight improvement.
David Owen, an economist at IHS Markit, said the lack of load shedding in April has been welcomed by business. “The latest PMI data showed activity stabilising in April. This helped push the headline reading back into growth territory for only the second time in 10 months,” he said.
Owen noted that new orders did not rise, due to slow customer response rates. Customers, he said, are awaiting elections results vefore making commitments.
Poor demand levels, meanwhile, meant that sellers and suppliers were forced to reduce prices in April, but business profit margins should not be affected, he said.
“Some panellists hope for a pick-up after the election which, if it does appear, may be sorely needed,” Owens said.
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