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The Sales Managers Index: Africa

Released: April 25, 2016

African SMI signals slowest rate of economic activity in survey history

  • Business expectations at lowest level since July
  • Sales and jobs fall while market growth eases further
  • Unfavourable exchange rates drive inflation higher

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 to 55.1 in April from 56.3 in March. This was the fifth consecutive month of declines and the lowest level in the survey history. Nevertheless, the latest reading indicated continued improvements in business conditions across African companies. Nigeria again led the Pan-Africa’s economic expansion during April, even though its rate of growth weakened to a record low. In the second position was South Africa, with its rate of activity decelerating during the latest survey period. Egypt also continued to slow down while the economic downturn in Algeria worsened at slightly weaker pace than last month.

Business expectations remained positive but has now eased in each of the past seven months. The Business Confidence Index signalled the lowest level since July. Companies commented on weakening demand conditions, political unrest, high inflation, rising unemployment and low commodity prices.

The Market Growth Index fell to a survey low in April, indicating a weaker but solid rate of market expansion. In addition, the Product Sales Index, which represents sales made by panellists’ own companies, fell below the 50.0 no-change mark for the first time on record. The latest reading, nevertheless, pointed to only a marginal drop in sales. Of the biggest economies covered, sales fell, especially, in Nigeria and Algeria.

Moreover, unfavourable exchange rate movements and low oil & other commodity prices continued to feed through prices charged. The Prices Charged Index rose further in April, with the rate of inflation accelerating to the fastest on record. Prices rose sharply, particularly, in Nigeria and South Africa while strong increases were also reported in Algeria and Egypt.

Employment levels, meanwhile, declined again in April, with the Staffing Index registering below the 50.0 no-change mark for the second successive month. Notably, job losses were reported in Nigeria, Egypt and Algeria.

World Economics Chief Executive Ed Jones commented on the release:

“SMI data signalled that Pan-Africa’s growth continued to slow down in April. Sales fell in line with employment levels while market growth registered the weakest pace in survey history. Business confidence remained positive but has now eased in each of the past seven months. Furthermore, prices charged continued to rise sharply as unfavourable exchange rate conditions continued to impact on the level of price inflation.”


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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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