South African private sector activity expanded again in February but at a slightly slower pace than the previous month, with new orders remaining flat while optimism was lifted by Covid-19 vaccine rollouts, a survey showed on Wednesday.
IHS Markit's Purchasing Managers' Index (PMI) slipped to 50.2 in February from 50.8 in January, above the 50 level that denotes expansion for the fifth month in a row.
The new orders sub-index remained static for the third consecutive month, just below the expansion level. Output also slipped, while employment hit a four-month low as businesses looked to lower input costs and draw down inventories.
"The slowdown resulted in larger cuts to staffing and inventories as businesses looked to remove excess capacity and offset rising cost pressures," said IHS Markit economist David Owen.
"However, this could further depress sales, particularly as several firms commented that job losses were contributing to lower domestic demand. Vaccines could provide a ray of light and encourage greater business investment, but for now, economic growth remains mild."
On Sunday, South Africa signed an agreement with Johnson & Johnson to secure 11-million Covid-19 vaccine doses, while easing lockdown restrictions as new cases declined.
The second phase of the country's vaccination programme,which includes the elderly, essential workers and those withco-morbidities, is set start around late April or early May.