Business conditions in South Africa remain buoyant, according to the seasonally adjusted Investec Purchasing Managers Index, released on Monday.

The PMI increased to 59.8 index points in June — and according to Investec's head of fixed income, André Roux, could shoot above the 60-level soon if current conditions persist.

The PMI has only moved above the 60 index points-level on two occasions — in April 2002 and July 2005. The PMI reached 57.6 index points in May.

The manufacturing revival has also continued, PMI figures suggested, with new sales orders — up to 65.7 index points in June from 63.7 points in May — showing that "demand conditions are clearly supporting the manufacturing revival," Roux said.

However, Investec's price index surged to a four-year high in June — a clear warning that prices have rocketed this past month. According to Investec, the index increased to 77.3 from 68.8 index points.

Roux said: "Its rise can be attributed to continued strong demand conditions, a weaker currency and high oil prices."

The last time the price index moved above the 70-level was in 2002.

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