South Africa’s Private Sector at Slower Pace in November- PMI

South Africa’s Private Sector at Slower Pace in November- PMI

A survey on South Africa’s private sector activity on Wednesday showed a decrease again in November, although at a slower pace than the previous month, as firms cut inventories to their lowest level in more than four years, Reuters reports.

The Purchasing Managers’ Index (PMI), compiled by IHS Markit, rose to 48.2 per cent in November from 46.9 per cent 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 50.0 per cent from 50.2 per cent in October.

According to IHS Markit Economist, David Owen “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 Q4.”

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 per cent as manufacturing, agriculture and retailing offset a sharp slide in mining output.

Owen added “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.”

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