South Africa Private Sector Activity Shrinks in June –S&P PMI
The S&P Global South Africa purchasing manager index (PMI) came in at 48.7 in June 2023, pointing to the fourth consecutive month of contraction, but edging up from the previous month’s figure of 49.6.
The decline in client demand led to a continued decrease in new business intakes albeit the pace of contraction was moderate and slightly weaker than the previous month.
The construction, services, wholesale & retail sectors, and industry showed expansion, while new orders from foreign markets further fell due to weak global economic conditions.
On the price front, an uptick in input prices was the slowest in five months, mainly due to weaker rises in purchase prices and staff costs, and reports of lower transport expenses, while the uplift in output charges remained steep, as firms essentially chose to pass cost rises to their customers.
The survey showed that lower levels of electricity cuts by state power utility Eskom and a reduction in shipping delays meant supply chains improved for the first time since 2019.
“South Africa’s private sector saw some relief in June as the intensity of load shedding (power cuts) was much weaker than anticipated,” Owen said. Many South Africans were facing daily power cuts of about 10 hours, but there have been some signs of improvement in the last few weeks with an increase in generation capacity by Eskom.
Looking ahead, firms were generally optimistic and the highest recorded for seven months, hoping to ease inflation and load shedding, new clients, and higher sales.
