Standard Bank. Picture: FINANCIAL MAIL
Standard Bank. Picture: FINANCIAL MAIL

Sentiment in the private sector is looking up, according to the Standard Bank purchasing managers index (PMI).

The index, which looks at the whole economy, went up from 50 in May to 50.9 points in June.

A score above 50 points indicates SA’s economy is growing.

The improved score was driven by stronger growth in new orders, which rose from 50.6 to 51.3 points amid greater demand that helped business activity rebound, placing the subindex in expansionary territory for the first time in the second quarter. Job creation also continued in June with the subindex up to 51.3 from 50.2.

Standard Bank economist Thanda Sithole said: "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."

Despite this, Sithole acknowledged that risks remained due to elevated international oil prices, rand weakness, the debate on land expropriation and global trade concerns.

The Absa PMI, which measures sentiment in the manufacturing sector, painted a very different picture on Monday. The index slumped to the lowest level in three months.

Business confidence has also taken a dive after the euphoria that followed President Cyril Ramaphosa’s election as president.