African PMIs: hindsight, insight & foresight
African purchasing managers’ index (PMI) readings for Q3 2022 reflect economic weakness on the continent and we expect GDP data to tell the same story. We find that larger economies such as South Africa and Egypt have struggled more on their recovery paths than some of the smaller countries like Kenya and Uganda.
What you will learn:
- Because accurate and timeous data in Africa are scarce, the PMIs are especially valuable as it is a leading indicator of economic activity and provides useful insights to market analysts and investors. Data derived from the index is useful to measure economic activity. We have used these indices to construct both weighted and median aggregate PMIs for Africa to assess more recent business activity and to examine what this means for economic activity on the continent going forward.
- Recovery paths across the continent have been uneven. Activity in some countries has oscillated around the 50-point neutral level, while in others, such as Egypt, it has not been able to breach that threshold for almost two years. Activity in Nigeria has remained above the 50-point threshold since its initial slump caused by the Covid-19 pandemic. PMI readings over the past two years also show that, in many African countries, political uncertainty, particularly around the time of elections, hinders private sector business activity.
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