South Africa's private-sector activity expands in Feb – PMI

5th March 2019

By: Reuters

  

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Activity in South Africa's private sector expanded for the first time in eight months in February, as output stabilised and new orders fell at a slower pace, a survey showed on Tuesday.

IHS Markit's Purchasing Managers' Index (PMI) rose to 50.2 in February from 49.6 in January, breaching the 50 mark that separates expansion from contraction for the first time since June 2018.

"The latest survey showcased the resilience of South African businesses in the midst of repeated setbacks," said IHS Markit economist David Owen.

"Output stabilised despite load-shedding from Eskom affecting a number of businesses, while employment grew as firms tapped into the pool of unemployed workers."

South Africa suffered its worst power cuts in several years in February due to plant-related problems at power utility Eskom, diesel shortages and planned maintenance.

New orders fell in February, IHS Markit said, but the rate of deterioration was the slowest in eight months of declines.

Despite the improvement in the headline PMI, overall demand was still falling, IHS Markit said.

"The return to declining new export orders has dampened businesses' spirits somewhat. Supply chains faltered slightly as well, with some companies reportedly constrained by raw material shortages," said Owen.

Edited by Reuters

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