There was some good economic news in August, with the recently released Absa Purchasing Managers’ Index (PMI) showing a rebound from the record decline in July.
Overall, the PMI rose to 57.9 points, up from the previous month’s 43.5 and still higher than June’s 57.4 points.
Absa attributed some of the increase to a normalisation of demand and output after the July riots, along with the easing of lockdown restrictions.
However, the bank cautioned that the PMI for the third quarter as a whole would probably still be lower than the second due to the damage suffered by businesses in July.
Both the business activity and new sales orders indices rose by roughly 30 points, ending at 58.5 and 60.9 respectively.
Recovery was especially noticeable in sectors with strong links to the hospitality and liquor industries, helped along by a rise in local demand.
Inventories went from 39.1 points in July to 54 in August.
The only index to show a decline was employment, which fell from 47.6 to 47.1.
However, this was a smaller decline than that experienced in July.
Absa also noted that opinion among respondents was less optimistic in the August survey than previously recorded, with index tracking of business conditions in six months expected to fall to 59.7 points.
This pessimism could be attributed to concern about the affect of the Delta variant on economic activity, along with higher fuel prices and a weakening rand.