What you need to know:
The Stanbic Bank Purchasing Managers’ Index, which interviews business executives and purchasing managers, indicates that the 51.6 score is the highest in five months, reflecting continued improvement in the business environment despite existing economic
The Stanbic Bank Purchasing Managers’ Index has indicated a rebound in new orders and output, signaling recovery from more than five months of dampened growth.
The index, which interviews business executives and purchasing managers, indicated that Purchasing Managers’ Index had posted a 51.6 score in September compared to 50.5 in August.
The score is the highest in five months, reflecting continued improvement in the business environment despite existing economic shocks.
However, the score, which has improved for the second month, is still below the 52.5 average, but above the 50 mark above which is an indication of improved economic activity.
During the month, Stanbic indicated, aggregate demand increased, supporting a rise in output and new orders, which have both continued to build on gains reported during August.
The index recorded growth in output and new orders in agriculture, industry and services sectors but reductions were recorded in construction and wholesale and retail.
However, input prices remained high for the fourteenth successive month, mainly driven by an increase in costs of fuel and electricity that were reported across all the five surveyed sectors.
Mr Mulalo Madula, the Standard Bank economist, said at the weekend that while the 51.6 score was still below the average, it was the highest level in five months and has been in expansionary territory for the second month.
However, during the month, the index noted, companies scaled back on employment and purchasing activity, a trend that has been ongoing in the last four months.
“Although some [companies] increased staffing levels in response to higher new orders, the vast majority [97 percent] kept workforce numbers unchanged,” the report indicated but noted that employment increased in agriculture and services sectors, but decreased in construction, industry and wholesale and retail.
During the period, companies reported an increase in staff costs due to an increase in cost of living, which as a result, partly contributed to an increase in selling prices, extending the current sequence to 13 months.
New export orders decreased, continuing the five-month streak.