Activity in South Africa’s private sector improved slightly last month but overall business conditions remained subdued despite an uptick in employment and inventories, a survey showed on Tuesday.
Standard Bank’s Purchasing Managers’ Index (PMI) inched up to 49.9 in July from 49.6 in June. “A main drag to July’s PMI was the decline in new orders, which subtracted 0.1 points from the final index as it fell from expansion into contraction,” said economist at Standard Bank Kuvasha Naidoo.
The index managed a brief break above the 50 mark that separates expansion from growth in May after 11 months of contraction but has fallen back again, reflecting weak economic conditions. Africa’s most advanced economy shrank 1.2 percent in the first quarter of 2016.
A majority of the companies surveyed reported monthly falls in output and new business locally, as well as a decline in export orders. The firms said they had seen a rise in input prices, albeit at a slower rate than in the previous month.
“Overall input prices continued to rise, but at a slower rate, driven mainly by purchase costs as the pace of staff cost increases remained sticky,” said Naidoo.