PMI South Africa June 2022

The S&P Global Purchasing Managers’ Index (PMI) rose to a 13-month high of 52.5 in June from 50.7 the previous month. Consequently, the index rose above 50.0 unchanged, indicating a stronger improvement in business conditions from the previous month.

The June upswing was driven by economic recovery after devastating floods in KwaZulu-Natal in April. In June, activity grew at the fastest pace since May 2021. Moreover, the employment rate has increased significantly, which has reduced the backlog. However, the overall improvement was limited by the continued rise in price pressure. So, to protect themselves from potentially higher inflation in the coming months, firms have accelerated their buying activity, resulting in the strongest increase in inventory levels in five years. Meanwhile, delays in the supply of raw materials continued amid the ongoing war in Ukraine and quarantine in China. Finally, firm sentiment remained gloomy over fears of war and inflation, although it has improved since May.

FocusEconomics Consensus Forecast forecasts fixed investment growth of 4.2% in 2022, up 0.4 percentage points from last month’s forecast. In 2023, the group forecasts a 3.7% increase in fixed investment.