South Africa's private sector stays mired in contraction, PMI shows
South Africa's private sector remained stuck in contraction in October as weak demand, higher fuel costs and port and shipping disruptions weighed on activity, a business survey showed on Thursday.
The S&P Global South Africa Purchasing Managers' Index (PMI) held at 49.0 in October. The 50-point mark separates growth from contraction.
"Perhaps the most concerning signal from the latest survey was a sharp drop in business confidence. Expectations for activity over the next 12 months fell to their lowest since August 2020," said David Owen, principal economist at S&P Global Market Intelligence.
Output fell for a second straight month and at the fastest pace since December. New orders also declined again, though the contraction eased markedly from September, while export demand fell for the first time since May.
Cost pressures intensified as fuel prices pushed purchase price inflation to its highest since June. Firms often passed those costs on, lifting output price inflation to a four-month high, while supplier delays persisted amid hold-ups at the Port of Durban.
Although firms still expected output to rise over the coming year on average, sentiment weakened across all sectors.
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