Business activity in South Africa expanded at its fastest rate in five months in March as growth in new orders led to a rise in output for the first time since November, a survey showed on Tuesday.
South Africa's HSBC Purchasing Managers' Index (PMI) climbed to 51.6 in March from 50.0 in February, boosted by private sector companies reporting a rise in domestic demand. Private-sector employment also ticked up in March, after a slight decline the previous month. Comments by employers surveyed suggested they increased hiring in response to higher demand.
"March data signalled that operating conditions at South African private-sector companies improved for the first time in 2015," said Oliver Kolodseike, an economist at financial information services firm Markit, which helped compile the survey.
However, the rise in domestic output was countered by weak export orders, which contracted for a third consecutive month.
"Nevertheless, the combination of increased new order intakes, rising buying activity and an accumulation of pre-production inventories suggests that we should expect further output growth in coming months," said Kolodseike.
The PMI is a weighted average of new orders, output, employment, suppliers' delivery times and stocks of purchases in the private sector
Overall input costs for private companies continued to rise as the rate of inflation accelerated from a month ago, although remaining well below the long-run series average.
Staff costs increased at their joint weakest rate in the survey's history, easing pressure on overall input prices.
The PMI is a weighted average of new orders, output, employment, suppliers' delivery times and stocks of purchases in the private sector. Readings above 50.0 signal improvements in business conditions while those below show a deterioration.
Detailed PMI data are only available under licence from Markit and customers need to apply.
(Source: SABC News)