South Africa’s private sector contracted in September at its fastest pace since December as new orders fell sharply and supply bottlenecks and fuel-driven cost pressures intensified, a business survey showed on Monday.
• The S&P Global South Africa Purchasing Managers’ Index (PMI) fell to 49.0 in September from 50.5 in August.
• The 50-mark separates growth from contraction.
• “The downturn came amid renewed contractions in business activity, new orders and stocks of purchases, as firms often reported a weaker demand environment linked to rising prices and increased economic uncertainty,” said David Owen, Principal Economist at S&P Global Market Intelligence.
• New orders dropped at the sharpest rate in two-and-a-half years as customers delayed spending amid uncertainty over fuel prices and domestic and international economic conditions. Export business bucked the trend, rising for a fourth straight month.
• Supply chain pressures intensified as suppliers’ delivery times lengthened to the greatest extent since February 2024, with respondents pointing to congestion at the Port of Durban, shipping disruption and material shortages.
• Employment was little changed, with only a slight workforce reduction.
• Input cost inflation remained sharp, driven mainly by higher fuel prices, while purchase price inflation climbed to a three-month high. Companies raised selling prices at the fastest pace since June.
• Business expectations improved for a third month and reached their highest since May, as firms hoped easing supply problems and lower fuel prices would support output growth over the coming year.
- South Africa's private sector contracted in September with the PMI dropping to 49.0 from 50.5 in August, marking the fastest pace since December.
- New orders fell sharply to the steepest decline in two-and-a-half years due to weaker demand linked to rising prices and economic uncertainty.
- Supply chain pressures increased with suppliers' delivery times lengthening the most since February 2024, caused by congestion at the Port of Durban, shipping disruptions, and material shortages.
- Input cost inflation remained high, driven mainly by fuel prices, and purchase price inflation reached a three-month high, prompting companies to raise selling prices at the fastest rate since June.
- Business expectations improved for the third consecutive month, reaching their highest level since May amid hopes that easing supply issues and lower fuel prices will support growth.
