POST Online Media Lite Edition


Downturn in South Africa’s private sector extends to nine months

Staff writer |
February data signalled a continuation of the downturn in South Africa’s private sector that started last June.

Article continues below

Output and new orders both fell at accelerated rates, buying activity declined and work-in-hand decreased markedly. Meanwhile, input costs rose at the steepest rate in nearly two years, which in turn led to a sharp increase in output charges.

The PMI is a composite index, calculated as a weighted average of five individual sub-components: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and Stocks of Purchases (10%).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. Operating conditions at South African private sector companies deteriorated for a ninth successive month in February.

This was highlighted by the seasonally adjusted Standard Bank South Africa PMI registering 49.1. This was down from 49.6 in January and pointed to a modest worsening of conditions.

The main downward contributions to the headline index came from sharper declines in output and new orders, which companies generally attributed to a fragile economic environment. The data highlighted a broadbased decrease in new order intakes, as new export orders also fell.

What to read next

Business conditions in Egypt deteriorate to least extent since last August
Scotland’s private sector slipped into contraction
Downturn in Nigerian private sector eases during March