South African private sector activity contracted for a second consecutive month in January, hurt by weak demand and shipping disruption at the country’s major port, a survey showed on Monday.
The S&P Global South Africa Purchasing Managers’ Index (PMI) inched up to 49.2 in January from 49.0 in December. A reading below 50 shows contraction.
While demand levels continued to worsen at the beginning of the year, firms also faced supply challenges due to gridlock at Durban Port, one of the busiest shipping terminals in Africa.
“Delays to the processing of shipping containers meant that one in five firms saw their delivery times lengthen over the latest survey period, marking the second-fastest deterioration in supplier performance in nearly two years,” S&P said.
David Owen, senior economist at S&P Global Market Intelligence, said that companies also registered a decline in new orders, as the impact of inflation and weak customer confidence continued to be felt across all sectors.
However, the survey showed that South African firms were positive about business activity in 2024, with many predicting an improvement in economic conditions that could help drive expansion. (Reporting by Anait Miridzhanian; Editing by Toby Chopra)
