Activity in South Africa’s private sector inched lower in August, with overall business conditions remaining subdued despite a halt to a year-long contraction in output levels, a survey showed on Monday.
South Africa’s Standard Bank Purchasing Managers’ Index (PMI) slipped to 49.8 in August from 49.9 in July, with output levels and new orders increasing marginally while the decline in export orders accelerated.
Readings above 50 signal an improvement in business conditions on the previous month, while readings below the mark indicate a deterioration. South Africa has failed to breach the 50 mark since June.
“The stabilisation in August PMI to 49.8 from 49.9 comes as output in the private sector rose to 50 points following 15 consecutive contractionary monthly prints,” said economist at Standard Bank Kuvasha Naidoo.
Companies that noted higher activity said this was due to new clients and project wins, while those reporting a decline commented on challenging economic conditions.
South Africa’s economy is the brink of recession after contracting in the first quarter, while the possible arrest of the finance minister has rocked investor confidence and triggered a sharp fall in local assets.
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