World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data

The Sales Managers' Index: Africa

Released: September 18, 2014

Business Confidence continues upward path in September

  • Headline SMI up to 56.8 from 56.0
  • Market and Sales growth support confidence
  • Prices and payrolls stable in September

The Headline SMI registered 56.8 in September, an increase of 0.8 on its August value. This is the second consecutive positive monthly change after six months of decline.

In September all of the constituents of the composite index rose apart from Prices and Staffing Levels which both fell marginally indicating that most panellists are experiencing rising real business activity across Africa with potentially rising productivity.

The Africa Index is by far the most up to date assessment of economic activity in Africa, and provides the only available monthly data covering all sectors of the Pan-African economy.

Business Confidence
The Business Confidence Index measures how Sales Managers expect the economy to perform over the coming months. The Index registered a value of 66.7 in September, up by 0.3 on the previous month.

The survey of Business Confidence among panellists recorded a 2014 peak value of 73.0 in February before declining steadily until July. The latest data provides increasing evidence that this negative trend has now been reversed. The majority of panellists remain highly confident about future business conditions.

Market Growth
The Market Growth Index reflects growth of the general marketplace in panellists’ own industry sectors.

The Index value was 57.2 in September, up by 2.1 on August and the second monthly rise after four successive falls in this index.

Product Sales
The Product Sales Index represents sales made by panellists’ own companies.

The Index registered 54.9 in September, up by 1.8 on August. This was the second successive increase after two monthly falls. Panellists are experiencing rises in the rate of company sales growth again with a catch-up potential with growth in the markets they operate in.

Prices Charged 
The Prices Charged Index registered 54.2 in September, down by 0.3 on August. This small fall continues the trend decrease in the value of the Index since April’s level of 57.3. Panellists are seeing prices rising, but the rate of inflation is declining again after it ticked up marginally in August.

Staffing Levels
The Staffing Index reflects the number of staff taken on compared to the same period in the last year. The Index registered a value of 51.0, down by 0.1 on August after two months of no change. Panellists are witnessing stable and very small payroll growth across Africa.

World Economics Chief Executive Ed Jones commented:

"The Africa SMI is the only indicator that covers the entire continent of Africa – with every single recognised country accounted for, this Index is composed of the most up to date information about what is really going on across the Pan-African economy.

In September most of the indicators followed the upward path witnessed in August apart from Staffing Levels and Prices. The rise in the panellists’ Business confidence appears to be underpinned by increasing Market and Sales growth. This reinforces the indications that economic activity will strengthen in the coming months with few inflationary pressures."


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Notes to Editors
The Sales Managers’ Index is produced by World Economics and is based on original survey data collected from a panel of Sales managers in all sectors of the African economy except those controlled by Governments.

The Sales Managers’ Index results are calculated by taking the percentage of respondents that report that the 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.

About the Sales Managers’ Index
The Sales Managers’ Indexes are a set of unique economic activity reports covering a wide range of sectors and industries (except those controlled by Government) in over 70 countries worldwide. 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 really 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 the economy.

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

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809 days ago
Now I feel stpiud. That's cleared it up for me

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