Absa PMI ticks up to 48.5 in June
Financial services firm Absa’s Purchasing Managers’ Index (PMI) increased by 5.4 points to 48.5 in June on a seasonally adjusted basis.
Although the headline PMI remained in contractionary territory for an eighth consecutive month, Absa says it is encouraging to note that the current level is the second-highest for this year, with the March level of 48.7 having been the highest.
Positively, new sales orders increased by 7.8 points to 46.1 in June, signalling some recovery in demand.
While export sales recovered somewhat in June relative to May, volumes remain near the lowest levels seen this year.
According to Absa, this suggests that domestic demand boosted the large recovery in total new sales orders.
However, the improvement in demand failed to boost production as the business activity index decreased by 1.5 points to 41.9 points in June.
The supplier deliveries index increased by six points to 55.1 in June, which indicates that the delivery times were extended owing to some delays, possibly owing to the uptick in orders and suppliers becoming busier, as respondents did not mention any significant supply bottlenecks.
Moreover, the employment index rose by 9.7 points in June, reaching 49.7 points and marking the highest since March 2024.
“This is a big jump for this index, but it needs to be sustained for some months before we can be confident that the manufacturing sector is adding jobs at a significant pace,” Absa states.
The purchasing price index continued its downward trajectory, decreasing by 2.3 points to 58.1 in June.
Despite some volatility, the rand was on average 40c stronger to the dollar than in May and stayed below R18 to the dollar for a large part of the month.
On average, the Brent crude oil price was higher in June than in May, but the decline in diesel prices at the start of June likely helped.
The index tracking expected business conditions in six months’ time was unchanged at 62.5 points in June, following a significant 13.9 points increase in May.
The apparent end to the 12-day war between Israel and Iran may have helped ease nerves – as the PMI survey took place after this – with no further news on the global tariff front, Absa concludes.
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