South Africa: Private sector activity falls to over one-year low in December
Business conditions in South Africa’s private sector remained in contractionary territory for the eight month running in December. The IHS Markit Purchasing Managers’ Index (PMI) fell to 47.6 from 48.6 in November, marking a 14-month low and thus moving further below the critical 50-threshold that separates contraction from expansion in private sector activity.
In December, renewed load shedding by Eskom led both output and new orders to decline at the fastest rate in 14 months. Meanwhile, although the employment rate decreased marginally, firms reduced backlogs at the quickest pace since June, partly due to ebbing demand. On the price front, input price inflation rose at a modest pace in December, as did output price inflation. Finally, business sentiment was broadly unchanged in the month, with most firms expecting a pick-up in demand in the coming 12 months.