March 1, 2018 / 9:41 AM / 16 days ago

UPDATE 1-South Africa's Absa PMI rises above 50-mark in February

(Adds details, analyst comment)

JOHANNESBURG, March 1 (Reuters) - South Africa’s seasonally adjusted Absa Purchasing Managers’ Index rose in February to its best reading in nearly a year as companies anticipated activity would be boosted by the improved outlook for the local economy, a survey showed on Thursday.

The index, which is compiled by the Bureau for Economic Research and gauges manufacturing activity in Africa’s most industrialised economy, rose to 50.8 in February from 49.9 in January.

The 50-mark separates contraction from expansion, and it is the first since May 2017 that the index breached the point.

The increase in the headline number was driven by improvements in the business activity and new sales orders which together account for more than half of the PMI’s weight, Absa said in a statement.

Expected business conditions in six months’ time rose to their highest level since 2001 on the back of increased optimism about local economic and political conditions, Absa said.

“The sustained rise in optimism is likely supported by continued positive global prospects. More importantly, the outlook for the local economy has also improved over the recent months,” Absa said.

Analysts say investor and consumer confidence and local assets have rallied since Cyril Ramaphosa took over as leader of the ruling African National Congress in December. Ramaphosa was then elected President of South Africa two weeks ago.

The Treasury has raised its 2018 economic growth forecast to 1.5 percent from estimated growth of 1 percent in 2017. (Reporting by Mfuneko Toyana Editing by James Macharia)

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