Reuters News
South African private sector activity fell in October after holding steady in September, hurt by weak customer demand and high fuel prices, a survey showed on Friday.
The S&P Global South Africa Purchasing Managers’ Index (PMI) fell to 48.9 in October from 49.9 in September, moving further below the 50-point line that separates growth from contraction.
It was the first notable decline in business conditions since July and prompted a rapid cut to firms’ procurement levels, S&P said.
On the positive side, lower demand for inputs helped cool the rate of cost inflation. Staff numbers at South African firms also expanded for the third successive month, the survey showed.
“Input cost inflation slid to the lowest level in just over two years, as a sharp drop in input demand and slower wage hikes helped to cool inflationary pressures,” said David Owen, economist at S&P Global Market Intelligence.
“Nevertheless, output charges continued to rise at an above-average rate, signalling that consumer prices will continue to rise rapidly as firms pass on previously-absorbed cost burdens.”