South Africa: Absa Pmi Edges Up in February - but a Decline in the Employment Index Is Worrying


The Absa Purchasing Managers' Index edged up in February, indicating a rise in manufacturing activity. That is welcome, but the employment subcomponent declined, suggesting that employment levels remain depressed.

The Absa Purchasing Managers' Index (PMI) rose to 53 index points in February from the 50.9 recorded in the previous month. Remaining at about the neutral 50 level is a positive sign in itself.

"The most encouraging outcome of the February survey was a continued improvement in new sales orders. Following a rise in January, the index rose further to 54.0 index points, which is the best level since October 2020. The improvement was supported by better export sales relative to the previous month, while the loosening of local lockdown restrictions likely also contributed to an uptick in domestic demand," Absa said in a statement.

The business activity index, which had declined for four consecutive months, shot up 8.6 points to 52.1, while the inventories index climbed back above 50.

"After a slow and concerning start to the year, it would seem that the manufacturing sector has turned a corner if the latest PMI figures are anything to go by," NKC African Economics said in a commentary on the data.


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