Tweaking models in time of Covid offers better understanding of reality
Despite lockdown the Bureau for Economic Research headline PMI for April shows only slight decline from March
When your model doesn’t match reality, which do you choose to revise? This was the difficult question those at the Bureau for Economic Research (BER) must have asked themselves in early May as analysts across the country awaited the outcome of the purchasing managers’ index (PMI).
This globally recognised survey-based index is regarded as an accurate, timely gauge of business trading conditions. SA’s PMI is released slightly later than those of several other economies, and market participants had watched as lockdown measures devastated sentiment across the globe. Manufacturing PMIs for the UK, eurozone and US fell in April 2020 to record multiyear lows around the 30-35 index level...
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