Business Weekly (Zimbabwe)

Floods, load-shedding exert pressure on SA’s economy

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SOUTH AFRICAN factory output has yet to fully recover from April's widespread power cuts and devastatin­g floods in the eastern KwaZulu-Natal province, a survey showed, the latest setback for an economy reeling from surging fuel and food prices.

Absa Group's Purchasing Managers' Index (PMI), compiled by the Bureau for Economic Research, rose to 54.8 in May from 50.7 a month earlier, but remains well below the March recording of 60.

A subindex that measures business activity averaged below 50 for April and May, suggesting that manufactur­ing output may contract in the second quarter, the lender said in a statement on Wednesday.

The PMI rebound was largely driven by a significan­t recovery in the new-sales-orders index, reflecting a normalisat­ion in domestic-demand conditions after the floods and increased exports as port operations resumed. An index tracking expected business conditions in six months' time jumped to 63.3, after averaging 55.4 in the prior two months .“It is difficult to point to a single factor to explain the improvemen­t, but optimism that cost pressures at the start of the pipeline have peaked may explain some of the improvemen­t,” Absa said.

South Africa also moved through its fifth wave of coronaviru­s infections without renewed lockdown restrictio­ns, while “the recovery in export performanc­e and tentative signs of better functionin­g supply chains may have also buoyed sentiment,” it said.

 ?? ?? A survey has shown that South African factory output has yet to fully recover from April’s widespread power cuts and devastatin­g floods in the eastern KwaZulu-Natal province
A survey has shown that South African factory output has yet to fully recover from April’s widespread power cuts and devastatin­g floods in the eastern KwaZulu-Natal province

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