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Pan-Africa SMI at six-month low in December

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Staff writer ▼ | December 22, 2015
At a sixth-month low of 59.5 in December (November: 60.1), the World Economics Headline Sales Managers’ Index (SMI) signalled a continued strong improvement in business conditions across Africa.
Pan-Africa SMI
Index   World Economics Headline SMI
That said, the average SMI over the fourth quarter as a whole was the highest since Q2 2013. Readings above 50.0 indicate an overall improvement in business conditions, below 50.0 an overall deterioration.

Of the major economies, Nigeria continued to lead the economic expansion during December, despite its pace of growth easing to the lowest level since May.

The slowdown in Egypt also continued, taking its pace of expansion to a twenty-three month low. Although South Africa was the only one of these countries to signal faster expansion, its rate of growth remained behind that of Nigeria and Egypt. In contrast, Algeria contracted further.

Sector analysis data showed that activity in the manufacturing and the services sectors continued to slowdown during December.

The Manufacturing SMI fell to 53.6, the fourth straight month of declines while the Services SMI fell for the fifth month running to 57.7.

These figures, nevertheless showed a continuing robust expansion across both sectors of the region.

Business expectations towards future activity remained high during December although the degree of positive sentiment has eased to the weakest since March.

The Business Confidence Index, which measures how sales managers expect the economy to perform over the coming months, registered 73.3, down from 74.8 in November.

High levels of business expectations was still reported in Nigeria (90.4), while strong levels were recorded in Egypt (66.8), and South Africa (55.6). Meanwhile, negative sentiment was expressed in Algeria (48.0).

The Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, inched down slightly in December but was consistent with the strong expansions seen in prior months.

Similarly, the Product Sales Index, which represents sales made by panellists’ own companies, was little-changed from its November value. By biggest countries, Nigeria, Egypt and South Africa continued to report strong levels of sales whereas sales fell further in Algeria.

Survey data also showed that inflationary pressures remain substantial in December. The Prices Charged Index posted 55.0, down from 55.3 in the previous month. Apart from Algerian companies, whose selling prices continued to fall, prices charged continued to rise in Nigeria, Egypt and South Africa.

Furthermore, employment continued to rise at modest pace during December. The Staffing Index, nonetheless, signalled the slowest pace since July.

In particular, employment levels continued to rise in Nigeria, Egypt and South Africa whereas job losses were recorded in Algeria for the third straight month.