Private sector activity in South Africa contracted for the second consecutive month in November, driven by continued declines in output and new business volumes, a survey by S&P Global showed on Wednesday (3).
According to Reuters, the Purchasing Managers’ Index (PMI) rose slightly from 48.8 in October to 49.0 in November, but remained below the 50.0 mark that separates growth from contraction.
Price pressures intensified, with firms registering the sharpest increase in input costs in more than a year, prompting them to raise output prices at the fastest pace since February.
“Firms increased their selling prices at the quickest rate in nine months, which indicated only limited ability to absorb rising cost burdens,” said David Owen, senior economist at S&P Global Market Intelligence.
Overall consumer inflation in Africa’s largest economy currently stands at 3.6% year-on-year, up from the previous 3.4%.
However, business expectations improved to a 12-month high, with nearly half of surveyed companies forecasting increased activity next year, citing new business opportunities and hopes of a broader economic recovery.
Employment levels rose for the second month in a row, though the pace of growth slowed. Delivery times improved for the eighth consecutive month, albeit less significantly than in October, in a context of material shortages and transport disruptions.
The sector’s mixed performance showed declines in manufacturing and construction, contrasting with stronger demand in services and wholesale and retail trade, highlighting uneven economic pressures across different industries.
