SA’s pri­vate sec­tor growth slows down

Lesotho Times - - Business -

JO­HAN­NES­BURG — South Africa’s pri­vate sec­tor ex­panded at a much slower rate in Novem­ber, largely due to weaker growth in out­put and new or­ders, a survey showed yes­ter­day.

The HSBC Pur­chas­ing Man­agers’ In­dex (PMI) slipped to 50.5 in Novem­ber from 52.7 in Oc­to­ber as the ex­pan­sions in out­put and new or­ders fell to their low­est lev­els in three and four months, re­spec­tively.

“Ex­ter­nal de­mand is pos­i­tive but re­mains frag­ile as new ex­port or­ders ex­panded for a third con­sec­u­tive month, al­beit at a mar­ginal pace,” HSBC economist David Faulkner said.

“With inventory lev­els el­e­vated rel­a­tive to new or­ders, we do not ex­pect much of a neart­erm re­bound in out­put.”

With out­put and new or­ders sub­dued, there was lit­tle ap­petite for com­pa­nies to take on new work­ers, with the em­ploy­ment subindex for the pri­vate sec­tor stag­nat­ing at 50.0, down from 52.6 in Oc­to­ber, HSBC said.

The PMI is a weighted av­er­age of new or­ders, out­put, em­ploy­ment, sup­pli­ers’ de­liv­ery times and stocks of pur­chases in the pri­vate sec­tor. Read­ings above 50.0 sig­nal im­prove­ments in business con­di­tions while those be­low show a de­te­ri­o­ra­tion.

Mean­while, business con­fi­dence in South Africa edged higher to 90.8 in Novem­ber from 88.8 in Oc­to­ber, as the neg­a­tive im­pact of wage strikes that hurt the econ­omy ear­lier in the year wore off, a survey showed yes­ter­day.

but other do­mes­tic chal­lenges, most re­cently, re­newed elec­tric­ity short­ages, could trig­ger a fur­ther bout of poor con­fi­dence in Africa’s most ad­vanced but ail­ing econ­omy, the South african Cham­ber of Com­merce and In­dus­try (SACCI) warned.

“a slow­down in the economies of ma­jor trad­ing part­ners, as well as low U.S. dol­lar com­mod­ity prices, could also af­fect the business cli­mate neg­a­tively,” SACCI said in a state­ment. — Reuters

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