The major subcomponents of the PMI paint a mixed picture of underlying conditions. Two of the indices improved compared to March, while three declined. Indeed, only the index tracking suppliers’ performance came in above the neutral 50-point mark at 53.4 points in April.

The business activity and new sales orders indices recorded notable increases in April, but both remained in contractionary terrain.

Some respondents reported an improvement in export orders which may have supported overall demand, providing a boost to output.

In contrast, the inventories index slumped in April and fell to 42.5 points, which is more than ten points below a recent high reached in February. The employment index also moved lower to reach 41.9, which is 4.5 points below the average recorded during the first quarter.

Respondents turned slightly more optimistic about business conditions in six months’ time. The index tracking expectations rose to 62.3 points in April. The lack of load shedding during the month may have supported the slight improvement in sentiment.

The purchasing price index declined slightly compared to March. The deceleration in cost increases may have been supported by the slightly stronger Rand exchange rate.

Brent crude oil prices, however, rose during the month. Fortunately, the rise in international diesel prices was countered by the stronger Rand, which means that the local diesel price remains unchanged in May.

This article was originally published here