SA’s private sector growth slows down
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