Africa’s private sector entered the second half of the year on firmer footing, with business activity rising to its highest level in seven months in July as stronger demand and easing inflation supported growth across several economies.
BusinessDay’s analysis of Purchasing Managers’ Index data from S&P Global across eight African economies shows that the average PMI rose to 51.0 in July, its highest level since January, from 50.5 in June.
Six economies recorded an expansion in private-sector activity, the highest number since March, while two remained in contraction.
The improvement points to a broadening recovery in the continent’s private sector after a weaker June, when three economies recorded contractions. Ghana, Egypt, Zambia, Kenya and Mozambique all recorded improvements in their July PMI readings, while Uganda retained its position as the strongest-performing economy with a PMI of 55.5. Egypt remained the weakest at 46.8.
A PMI reading above 50 signals an expansion in business activity from the previous month, while a reading below 50 indicates contraction. The index is closely watched because it provides an early indication of changes in output, new orders, employment and business confidence.
