CNBC Africa

Economy

South Africa’s Absa PMI expands again in March

PUBLISHED: Thu, 01 Apr 2021 11:42:33 GMT

Mfuneko Toyana

Reuters

Pic: Waldo Swiegers / Bloomberg

JOHANNESBURG, April 1 (Reuters) – South Africa’s seasonally-adjusted Absa Purchasing Managers’ Index (PMI) expanded for third month in a row in March as new sales and exports rose with the easing of coronavirus lockdown restrictions, a survey showed on Thursday.

The index, a gauge of manufacturing activity in Africa’s most industrialised economy, rose to 57.4 points in March from 53.0 points in February.

The survey showed a broad-based improvement, with all of five subcomponents in survey improving, with only the employment sub-index remaining below the 50-point mark that separates expansion from contraction.

The jump in new sales order was mainly driven by strong exports, the survey said, reflecting “the recent better-than-expected manufacturing PMI readings in Europe”, according to Absa.

South Africa’s trade surplus widened to 28.96 billion rand ($1.96 billion) in February, more than double the surplus in the previous month, extending a trend that began in May last year.

Business activity recorded another sharp increase, up 8.6 points, but Absa questioned whether this would be sustained.

“Purchasing managers turned slightly less optimistic about expected business conditions in six months’ time,” Absa said in the release.

The country has seen a sustained drop in the rate of new COVID-19 infections in 2021, leading to a loosening of lockdown restrictions that has supported economic activity, particularly in consumer sectors.

Restrictions have however been temporarily tightened for the upcoming Easter weekend. The slow pace of the rollout of coronavirus vaccines, with the country only expected to achieve herd immunity in 2022, has dampened business sentiment.

(Reporting by Mfuneko Toyana)