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Business Report writes that business sentiment turned negative in May, marking the first prolonged subdued outlook as firms became increasingly concerned about the extended Covid-19 lockdown.
The Markit’s Purchasing Managers’ Index (PMI) on Wednesday showed that private sector activity fell for the thirteenth month in a row to reach a record. The PMI fell to 32.5 points from 35.1 points in April, way below the 50 point threshold that separates growth and contraction. Markit commented that the PMI indicated an unprecedented collapse in business conditions as output and new sales collapsed during lockdown measures that were extended in the month. Markit economist David Owen observed: “Most notably from the latest survey results, business sentiment regarding the 12-month outlook for activity turned negative for the first time in the series. As such, firms are increasingly concerned that the extended lockdown period may hurt business activity for some time.” He added that the relaxation of lockdown regulations this month could see a strong rebound in the PMI if businesses were able to restart quickly. Markit also reported that PMI recorded a drop in employment, leading to a second consecutive fall in staff costs during May, one that was much quicker than the one seen in April.
- Read the full original of the report in the above regard by Siphelele Dludla on page 11 of Business Report of 4 June 2020
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