South African Private Sector Contracts In October

(RTTNews) - South Africa's private sector activity logged a downturn for the first time in seven months in October amid renewed falls in output and sales, survey results from S&P Global showed Wednesday.

The purchasing managers' index for the private sector economy dropped to 48.8 in October from 50.2 in September. Any score below 50.0 indicates contraction.

The downturn occurred despite a solid improvement in supplier performance in the private sector, linked to a reduction in logistics issues and lower input demand.

Inflationary pressures also moderated further on the back of the rand's exchange rate against the US dollar, along with slower wage inflation.

Despite these positive developments, output fell at the sharpest pace in seven months due to weaker inflows of new business, which declined most since March.

Lower new sales were mainly attributed to weak customer purchasing power amid uncertain domestic conditions and a sharp fall in export demand.

As a result, companies lowered their backlogs of work during October, which was also helped by a slight increase in staffing numbers.