Absa Purchasing Managers’ Index (PMI) May 2023


The seasonally adjusted Absa Purchasing Managers’ Index (PMI) edged down to 49.2 in May 2023 from 49.8 in April. The headline index has now signalled a deterioration in business conditions for four consecutive months. In addition to the downbeat assessment of the current environment, respondents turned notably more negative about business conditions going forward. The index tracking expected business conditions in six months’ time fell to 43.7 in May, from 51 in April. This is the most pessimistic respondents have been about the near-term outlook since the strictest phase of South Africa’s COVID-lockdown three years ago. Eskom confirming earlier concerns about the possibility of higher stages of load-shedding during winter likely contributed to the souring in sentiment.

Moving back to what the survey suggests about conditions in May, the business activity index was virtually unchanged from a subdued April. Cumulative load-shedding was roughly similar in April and May and likely did not weigh more/less on activity in May than the previous month. In all, the average index level of business activity in the first two months of the second quarter is below the first-quarter average. This suggests that the sector may once again detract from quarterly GDP growth after an expected expansion in the first quarter. Furthermore, the new sales orders index was stuck in negative terrain for the fifth straight month, although it improved from April. While export sales had held up well so far in 2023, respondents observed a notable deterioration in May.

Meanwhile, the purchasing price index ticked up once again in May. The significantly weaker rand exchange
rate likely added to upward pressure on costs and offset the mitigating impact of the drop in fuel prices at the
start of May.

View all PMI Reports

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