South Africa: Private-sector conditions deteriorate in March
The S&P Global Purchasing Managers’ index (PMI) fell to 49.7 in March, down from February’s 50.5. As such, the index fell below the 50.0 no-change mark, signaling a deterioration in private-sector operating conditions from the previous month.
March’s downturn largely reflected yet another contraction in output, following some stability in February. The ongoing power-supply crisis continued to weigh on activity. Moreover, new business saw a slight reduction due to stubbornly high inflation dampening client demand. More positively, exports sales rose in March.
Turning to prices, both input expenses and output prices rose at the strongest rates in eight months in March. A weaker rand against the U.S. dollar, continued load shedding and higher wage costs all drove inflation. Lastly, firms’ sentiment improved in March, ending a five-month streak of declining sentiment. Consequently, firms increased headcounts in the month.