South African Private Sector Contracts In September

(RTTNews) - South Africa's private sector activity showed a downturn in September amid renewed declines in business activity and new orders, survey data from S&P Global showed on Monday.

The purchasing managers' index for the private sector economy dropped to 49.0 in September from 50.5 in August. A score above 50.0 indicates expansion, while any reading below 50 suggests contraction.

South African companies reduced their business activity to the greatest extent since May due to weaker demand conditions and input constraints and delays.

New orders fell at the sharpest rate for more than two years, linked to caution among businesses and consumers due to uncertainty surrounding domestic and international economic conditions and the impact of higher fuel prices. However, new export orders rose for the fourth successive month.

Employment across the sector was relatively stable in September, while supply chain pressures intensified amid worsening conditions at the port of Durban along with shipping delays caused by the war in the Middle East.

On the price front, input cost pressures remained sharp due to higher fuel prices, though the rate of inflation eased since August. Selling price inflation rose to a 3-month high.