PMI READING
Reshuffle and downgrades knock confidence
The Absa purchasing managers’ index the weakest reading in 15 months
President Jacob Zuma’s cabinet reshuffle and the credit-rating downgrades that ensued have resulted in a significant knock to business confidence. The Absa purchasing managers’ index (PMI) contracted in April after three successive months of growth to record the weakest reading in 15 months and the sharpest fall since 2011. After signs of growth in the first quarter of 2017, the seasonally adjusted index slumped to 44.7 in April from an average of 51.9 for the first quarter. A score above 50 indicates an expanding manufacturing sector. Absa conceded that "the deterioration is worrying" but said that "the magnitude of the drop may not be reflected fully in official data".
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