FILE PHOTO: A worker sells eggs to a customer at a spaza shop in Thembisa, on the East Rand, in South Africa, August 2, 2023. REUTERS/Siphiwe Sibeko

JOHANNESBURG, Jan 4 (Reuters) – South African private sector activity shrank in December as companies signalled a greater impact on business amid the gridlock problems afflicting the country’s ports, a survey showed on Thursday.

The S&P Global South Africa Purchasing Managers’ Index (PMI) fell to 49.0 in December from 50.0 in November. A reading above 50 indicates growth in activity.

Supply chains, inventories, output and demand were all hit by the port crisis in Durban, with delivery times lengthening at the sharpest rate in close to two years, the survey showed.

“The port gridlock is likely to further dent the economy at the start of 2024 as businesses face greater shortfalls in input supply,” said David Owen, senior economist at S&P Global Market Intelligence.

Rotational power cuts implemented by power utility Eskom are also expected to remain an issue after electricity outages reportedly hit output and sales in December, he added.

Equipment shortages and maintenance backlogs after years of underinvestment have meant South African state-owned logistics company Transnet has struggled to provide adequate freight rail and port services in the country.

(Reporting by Bhargav Acharya; Editing by Hugh Lawson)