South African economic activity is picking up, but the latest Absa Purchasing Managers' Index (PMI) suggests that the spectre of jobless growth will haunt any recovery.
The Absa Purchasing Managers' Index (PMI) measures the expectations of purchasing managers, whose buying orders today are based on assumptions about the future performance of their businesses. The Absa PMI, which is the South African benchmark on this front, plunged in April to a record low of 5.1 - far below the neutral level of 50. That was during the "hard lockdown" and the index has since rebounded.
Absa said on Monday 3 August that the PMI declined slightly to 51.2 index points in July from 53.9 in June, "but continued to signal a further month-on-month improvement for conditions in the manufacturing sector". This is because at over 50, the seasonally-adjusted index remains in positive territory.
"On a positive note, respondents reported a slight increase in export sales for the first time since October 2019. The shape of the GDP recovery in Europe, a key market for South African manufacturing goods, will be important for local producers targeting the export market going forward," Absa said.
After the disaster that was April,...