PMI REBOUNDS IN MAY ON EASING OF LOCKDOWN

THE ABSA Purchasing Managers’ Index (PMI) rebounded to 43.2 index points after plunging to a low of 5.1 in April, with the group saying that the sentiment will improve this month if the lockdown is maintained at level 3 for the entire country. Absa said manufacturing output rebounded on the easing of the restrictions in May despite subdued economic activity. Absa economist Miyelani Maluleke said some respondents indicated that there was not sufficient demand to warrant a further ramp-up of production last month. Maluleke said the improvement was driven by factories returning to production after the nationwide lockdown brought output to a near standstill in April. “The sharp rise in the business activity index in May is relative to virtually nothing in April and still suggests very subdued overall activity levels,” Maluleke said. South

Africa went into lockdown at the end of March in a bid to curb the spread of the Covid-19 pandemic, halting manufacturing production except for essential goods. Absa said the May PMI showed that employment remained stuck at a low, rising by a marginal 0.2 points to 26.8 in May. It said the rebound did not mean that output was likely to take some time before the supply-chain disruptions were filtered out of the system and for global, as well as local demand to return to normal. The bank said the risk that load shedding could reappear as the economy gets going could further hamper the recovery. |