JOHANNESBURG, July 4 (Reuters) – South African private-sector activity expanded modestly in June after two months of stagnation, signalling a return of momentum to the economy, a survey showed on Wednesday.
The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, inched up to 50.9 in June from 50.0 in May, with the sub-indexes for output, new orders and employment all above the 50 mark that separates expansion from contraction.
The overall reading was the highest since March. Economic activity has stalled in recent months, with disappointing data stifling some of the optimism generated by Cyril Ramaphosa’s rise to the presidency late last year.
First-quarter gross domestic product figures last month showed the worst quarterly contraction in nine years, while reading of business confidence also sank. Economists believe the slump is temporary, however and predict growth will rebound during the rest of 2018.
“This is in line with our view that the PMI will, during the remainder of 2018, largely show signs of improving domestic business conditions influenced by domestic consumption expenditure and reasonable global growth,” Standard Bank economist Thanda Sithole said.
The survey showed overall input costs had risen at an accelerated pace, driven mainly by fuel prices, which hit an all-time high in April as international oil prices spiked and the rand currency tumbled against the dollar.