{"id":502753,"date":"2021-07-01T16:29:25","date_gmt":"2021-07-01T14:29:25","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=502753"},"modified":"2021-07-01T16:29:25","modified_gmt":"2021-07-01T14:29:25","slug":"south-africas-level-4-lockdown-threatens-economic-recovery-especially-if-it-continues-for-more-than-two-weeks","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/502753\/south-africas-level-4-lockdown-threatens-economic-recovery-especially-if-it-continues-for-more-than-two-weeks\/","title":{"rendered":"South Africa’s level 4 lockdown threatens economic recovery – especially if it continues for more than two weeks"},"content":{"rendered":"

The move to adjusted alert level 4 lockdown restrictions at the end of June could stall the broader economy\u2019s quarterly momentum at the start of the third quarter – especially if sustained for longer than the initial two-week period, Absa economists warn.<\/p>\n

This could result in a possible slowdown in the demand for selected manufactured goods, and production as a result, the group said in its Purchasing Managers\u2019 Index (PMI) research note on Thursday (1 July).<\/p>\n

“Amid concerns about the magnitude of the third wave of Covid-19 infections and South Africa\u2019s move from level 2 to level 3 in mid-June, purchasing managers\u2019 assessment of expected business conditions already turned less positive in June,” Absa said.<\/p>\n

The bank’s index tracking expected business conditions in six months declined for a second month to 59.2. While this still signals an anticipated improvement in business conditions, it is less so than before.<\/p>\n

\"\"<\/a><\/p>\n

“The move to level 4 is likely to have soured expectations further, specifically for those businesses with close ties to the hospitality industry,” Absa said.<\/p>\n

“On the positive side, the outlook for manufacturers targeting the European and US export markets remains very bright, with recent international PMI readings remaining at or near record-high levels.”<\/p>\n

PMI<\/strong><\/p>\n

The purchasing managers index (PMI) is an economic activity index based on a survey conducted by the Bureau for Economic Research and sponsored by Absa.<\/p>\n

The monthly surveys are conducted under a representative group of purchasing managers in the South African manufacturing sector.<\/p>\n

These managers have to indicate each month whether a particular activity, such as new sales orders, for their company has increased, decreased or remained unchanged.<\/p>\n

The seasonally adjusted PMI edged down slightly to 57.4 index points in June 2021 from 57.8 in May 2021.<\/p>\n

However, all five of the headline PMI\u2019s major subcomponents were above the neutral 50-point mark in June – a positive sign for South Africa’s economic recovery.<\/p>\n

\"\"<\/a><\/p>\n

Furthermore, the average reading of both the headline PMI as well as the business activity index during the second quarter was higher than recorded in the first quarter of 2021.<\/p>\n

“This suggests that the sector\u2019s output recovery was maintained in the second quarter, with another quarterly expansion likely,” Absa said<\/p>\n

“A significant annual expansion is effectively guaranteed given the extremely low base set in the second quarter of 2020.”<\/p>\n

\n
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Read:\u00a0It\u2019s not all doom and gloom for South Africa \u2013 but there is a catch: economist<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The move to adjusted alert level 4 lockdown restrictions at the end of June, especially if sustained for longer than the initial two-week period, could stall the broader economy\u2019s quarterly growth momentum at the start of the third quarter, warn Absa economists.<\/p>\n","protected":false},"author":10,"featured_media":398917,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[29,26],"class_list":["post-502753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-absa","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/502753","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=502753"}],"version-history":[{"count":11,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/502753\/revisions"}],"predecessor-version":[{"id":502801,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/502753\/revisions\/502801"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/398917"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=502753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=502753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=502753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}