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Cape Town - South African business conditions in March improved for the seventh month running, the Standard Bank Purchasing Managers' Index (PMI) showed on Wednesday.
At 50.7, up from February’s 50.5, the PMI was little changed but signalled an ongoing improvement in private sector operating conditions in the longest sequence of positive readings in over four years. A reading above 50 indicates an increase, while one below 50 shows a decrease.
The latest figure was broadly in line with the long-run survey average of 50.8, and the PMI's five components were all mildly positive in March. Output, new orders and stocks of purchases increased at slightly faster – albeit still weak – rates than in February, but the pace of job creation slowed.
Suppliers’ delivery times lengthened only slightly. Private sector activity remained muted, despite the slight uptick, and the strength of new order growth was weak overall and insufficient to generate rising backlogs which were broadly unchanged
during the month.
Although the rate of workforce growth slowed since February, employment growth was maintained for the ninth month running in March, linked to expanded capacity and new work. Staff costs rose at one of the weakest rates to date, while purchase price inflation was the second-slowest in the series history.
Input buying went up for the sixth month running, but the rate of growth remained marginal. Cost pressures were relatively weak and prices charged by South African companies went up only slightly in March. The rate of inflation was the second-slowest in the survey's history.
Standard Bank Economist Kim Silberman said: “The accelerated expansion in March’s PMI was supported by improvements in key demand and supply sub-indices, as well as stocks of purchases which continue to support the idea that economic
activity may have troughed."
