POTENTIAL MANUFACTURING CONTRACTION
PMI index falls on lower business confidence and recession
The recession and low business confidence are dragging down operating conditions, which have slumped to their weakest level in 14 months, according to the Standard Bank purchasing managers index (PMI), released on Wednesday. The index dropped to 49 in June, from 50.2 in May. The survey gauges operating conditions and its latest reading signals a potential contraction in manufacturing in the coming months. Its latest reading also represents the sixth consecutive monthly decline in the index. Standard Bank strategist Shireen Darmalingam said the index was expected to remain low based on weak business confidence and the GDP contraction in the first quarter. Business confidence has declined to its lowest level since the 2009 recession. The Rand Merchant Bank and Bureau for Economic Research’s second-quarter business confidence index slumped 11 index points to 29 points, a reading well below the neutral 50-mark and an indication of poor confidence. “Depressed business confidence reflects...
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