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The Sales Managers Index: Africa

Released: January 25, 2016

Pan-African growth slows to ten-month low during January

  • Business confidence weakened but remains high
  • Sales and market growth hit lowest level in 7 months
  • Inflationary pressures ease but remain substantial

The World Economics Headline Sales Managers’ Index (SMI) for Africa – a composite indicator providing the most up-to-date monthly assessment of economic activity in the region – fell from 59.5 in December to 58.7 in January, reaching a ten-month low. That said, despite cooling since September’s 31 month high, the rate of expansion stayed sharp in the context of historical data. By biggest economies, Nigeria remained the main contributor to the region’s overall economic expansion during January, even with its pace of growth easing to the lowest level since March 2015. Egypt registered a slightly quicker rate of growth, with its pace of expansion picking up to a two-month high. South Africa also reported a stronger increase in activity, although its rate of growth was still behind that of Egypt. Meanwhile, the downturn in Algeria continued to intensify.

Business expectations remained high during January although the level of positive sentiment softened to the weakest in eleven months. The Business Confidence Index, which measures how sales managers expect the economy to perform over the coming months, posted 72.4, down from its value on the previous month. High levels of business confidence was still recorded in Nigeria (87.9), while strong levels were reported in Egypt (65.2), and South Africa (57.2). By contrast, stronger levels of pessimism were expressed in Algeria (44.0).

The Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, continued to signal strong rates of market expansion. However, the latest reading was the lowest since July 2015. Likewise, the Product Sales Index, which represents sales made by panellists’ own companies, registered the weakest pace since last July but showed that companies across Africa were still experiencing solid levels of sales growth. Notably, companies in Nigeria, Egypt and South Africa continued to report an expansion in product sales whereas those in Algeria reported a contraction.

January data also showed that inflationary pressures eased but remained substantial. The Prices Charged Index posted 54.4, down from 55.0 in December. In particular, prices charged continued to decline in Algeria while weakened further in Egypt.

Moreover, employment levels slowed again in January although remained at the modest pace registered on the month before. The Staffing Index fell to a year-low, with job numbers falling especially in Algeria while softening in Nigeria.

World Economics Chief Executive Ed Jones commented on the release:

“Latest SMI data signalled a further easing in the rate of growth of the African economy, with both sales and market growth rising at the weakest rates since July 2015. Companies, nevertheless remained optimistic about future growth as sales managers continued to increase their payroll numbers at a modest pace. At the same time, inflationary pressures persisted despite moderating slightly from the prior month. Overall, the latest data continued to point to strong levels of growth but signalled that the deceleration in economic activity will likely continue into Q1.”


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Notes to Editors
The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of African companies stratifying all Industry Classification Board (ICB) sectors.

The Sales Managers’ Index results are calculated as diffusion indexes which have the characteristics of leading indicators by taking the percentage of respondents that report that activity has risen (“Increasing") and adding it to one-half of the percentage that report the activity has not changed (“Unchanged"). Using half of the “Unchanged" percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. An example of how to calculate a diffusion index: if the response is 40% “Increasing," 40% “Unchanged," and 20% “Reducing," the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates "no change" from the previous month.

The more distant the index is from the amount that would indicate "no change" (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity.

Three month Moving Averages are applied to each index to mitigate the effect of seasonal variations, original unadjusted data are not revised after publication.

About the Sales Managers’ Indexes
The Sales Managers’ Indexes are a series of products developed by World Economics which counts panellists in over 70 countries worldwide. Designed to raise the voice and profile of sales people throughout the world, the Sales Managers’ Indexes provide the earliest indication each and every month of the direction of economic activity, and the speed at which its markets are growing.

Sales Managers are unique as an occupational group in being right at the front line of economic activity. The Sales Manager is ideally placed to feel the first few whispers of caution in the market or to see the new green shoots of economic recovery.


The Sales Managers’ Index brings together the collective wisdom of Sales Managers and consequently produces the best and earliest source of understanding about what’s really happening in each economy.

The Sales Managers’ Index has been developed by World Economics, a leading edge provider of original economic data. Sister products include the World Price Index, Global Marketing Index, World Economics Journal, as well as country level Growth Trackers.

About World Economics
World Economics is an organisation dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy. Its parent company Information Sciences Ltd has a long history of the development of key business information today used throughout the world, including the origination of the Purchasing Managers Indexes in Europe and Asia (now owned by Markit), and the development of WARC a global information provider for major corporations .

Currently our primary research objective is to encourage and assist the development of better and faster measures of economic activity. In cases where we believe we can contribute directly, as opposed to through highlighting the work of others, we are producing our own measures of economic activity.

Our work is mainly of interest to investors, organisations and individuals in the financial sector and to significant corporations with global operations, as well as governments and academic economists.

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