Survey records reduced activity in agriculture, construction
What you need to know:
- The survey, which measures monthly performance of the economy through interviewing business executives and purchasing managers, indicates that during February, the Purchasing Managers’ Index contracted to 51.2 compared to 53.2 in January.
Decline in agriculture, construction and industry activities weakened economic performance during February, according to a survey by Stanbic Bank.
The survey, which measures monthly performance of the economy through interviewing business executives and purchasing managers, indicates that during February, the Purchasing Managers’ Index contracted to 51.2 compared to 53.2 in January. However, despite the drop, the private sector recorded growth in output and new orders.
The index, however, remains above the 50 score, above which, is an indication of stability while a lesser score indicates a slowdown in growth.
The survey also noted a decline in employment, for the first time in five months while reports of extreme dry weather featured as a major growth knock down during the month.
Ms Mulalo Madula, an economist with Standard Bank, said the survey had returned a show of resilient economic performance in seven consecutive months.
“New orders continued to rise, supporting output, despite a second straight month of declines in new export orders and increases in input and output prices. Activity increased in the services, wholesale and retail sectors, but decreased in agriculture, construction and industry,” she said, noting that dry weather had, in some cases, negatively impacted output.
“Businesses are optimistic that production will pick up over the next 12 months given increased demand, lower inflationary pressures and expected rainfall,” Ms Madula said.
The survey also indicated that input costs such as electricity and water recorded increases, which could have impacted commodity prices that for the 18th month recorded increases.
Charges rose in agriculture, industry and wholesale and retail, but fell in construction and services, while suppliers’ delivery times lengthened for the third time in four months.
However, during the period, companies capitalised on growth in new orders to raise purchasing activity, which increased for the fourth month.
Overall, the survey noted companies remain optimistic, with close to 68 percent of respondents predicting a rise supported by rising customer numbers, softer inflationary pressures and the coming rains.