South African private sector activity grows in April as electricity crunch eases – PMI
Activity in South Africa's private sector grew in April, a survey showed on Monday, with easing electricity blackouts off-setting a slide in businesses selling prices as they continued to struggle with weak demand.
IHS Markit's Purchasing Managers' Index (PMI) jumped to 50.3 in April from 48.8 in March, the highest reading since June 2018 and back above the 50 mark denoting expansion, with manufacturers reporting a slight improvement in output and new orders.
"The fall in output from the recent power cuts was short-lived, which businesses will be pleased to hear," said IHS Markit economist David Owen.
Businesses interviewed for the survey said demand had cooled ahead of the May 8 national elections, where an all-out victory for President Cyril Ramaphosa's ruling African National Congress is almost certain.
"New orders failed to rise after firms reported slow customer response rates as they await the election results. Coupled with poor demand levels since mid-way through 2018, both sellers and suppliers were forced to reduce prices in April," Owen said.
Africa's most developed economy was rocked by the worst power cuts in half a decade in the first months of the year as ailing utility Eskom struggled with capacity constraints and faced climbing debt and a cash-flow crunch.
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