South Africa

South Africa PMI December 2023

South Africa: PMI decreases in December

The S&P Global Purchasing Managers’ Index (PMI) came in at 49.0 in December, down from November’s 50.0. As such, the index fell below the 50.0 no-change threshold, signaling deteriorating private-sector operating conditions from the prior month.

December’s downturn reflected deteriorations in new business, output and stocks of purchases. Vendor performance deteriorated to a near two-year low in the month: The country’s port crisis—especially in Durban—has continued to cause severe shipping delays. This drove firms to scale back output once again; they did so at the steepest pace in seven months. Similarly, new orders fell at the sharpest rate since the start of 2023, hurt by continued loadshedding, weak customer consumption and supply challenges. As a result, employment was reduced in the month.

Turning to prices, input price inflation was stable at November’s rate: Higher transport and energy costs were outweighed by weaker demand and a stable South African rand. Meanwhile, selling charges grew only at a slightly faster pace than in the prior month. Lastly, output expectations for the coming year fell in December.

S&P Global’s senior economist David Owen shed light on the ongoing port crisis:

“The Durban port crisis had a destabilising impact on the South African economy in December. […] With the decline in supplier performance worsening, the latest survey data suggests that delivery delays are at a level that has been rarely exceeded during pre-Covid-19 times. This indicates that the port gridlock is likely to further dent the economy at the start of 2024 as businesses face greater shortfalls in input supply.”

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