South African private sector activity shrank again in November, albeit at a slower pace than the previous month, as firms cut inventories to their lowest level in more than four years, a survey showed on Wednesday.
The Purchasing Managers' Index (PMI), compiled by IHS Markit, rose to 48.2 in November from 46.9 in October but stayed below the 50 mark, which separates expansions from contractions, for the fourth straight month.
Four of the five sub-indexes in the survey were in contraction territory, with stock purchases the hardest-hit at a 52-month low. Output shrank, but at a slower pace than the previous month, while employment inched down to 50 from 50.2 in October.
"Firms will be glad to see the recent decline in activity soften in November, even if this was the fifth successive month where the PMI was below 50. Nevertheless, the current trend still suggests flat annual GDP growth in the fourth quarter," said IHS Markit economist David Owen.
Africa's most industrialised economy climbed out of its first recession in nearly a decade in the third quarter, posting quarter-on-quarter growth of 2.2% as manufacturing, agriculture and retailing offset a sharp slide in mining output.
"Importantly, input prices rose at a far slower pace in November. This will ease worries of stronger inflation and hence a further up-tick in interest rates," Owen added.