S.African business activity contracts in Sept -PMI
2022.10.05 03:32
© Reuters. FILE PHOTO: The Hillbrow Tower, an iconic tower used to identify the Johannesburg skyline, is seen as the sun rises, in Johannesburg, South Africa, June 20, 2019. REUTERS/Siphiwe Sibeko
(Reuters) – South African private sector activity contracted in September as increased power cuts led to steep falls in output and new orders, a survey showed on Wednesday.
S&P Global (NYSE:)’s South Africa purchasing managers’ index (PMI) fell to 49.2 in September from 51.7 in August. Readings below 50 indicate a contraction in activity.
Rates of decline for both output and sales were the sharpest recorded in 2022 so far.
“Output and new business fell at their quickest speeds since last December, as both businesses and consumers reined in spending due to load shedding (power cuts) and the cost-of-living crisis,” said David Owen, economist at S&P Global Market Intelligence.
However, Owen said there were signs inflationary pressures were easing on the back of lower commodity prices.
Power cuts have reached record levels this year in South Africa, as state utility Eskom’s inefficient coal-fired power stations have suffered repeated breakdowns.
