Decline in South Africa’s private sector eases, fanning recovery hopes -PMI

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

JOHANNESBURG, Jan 4 (Reuters) – South Africa’s private sector activity contracted for the sixth month in a row in December as both output and new orders fell further while purchases also dropped, though the overall rate of decline eased, a survey showed on Friday.

The Purchasing Managers’ Index (PMI), compiled by IHS Markit, rose to 49.0 from 48.2 in November, still below the 50 mark separating expansion from contraction that was last reached in June.

Three of the five sub-indices were contracted, but all showed slower rates of decline, signalling a recovery from October’s four-year low.

“Reports of a turnaround in the economy helped ease the decline,” said IHS Markit economist David Owen.

“The headline PMI was at its highest since July when conditions first deteriorated. Firms reported movement in a number of sectors, with the jobs market also elevated into expansionary territory,” Owen said.

Africa’s most industrialised economy went into recession in the first half of 2018 but grew by an unexpected 2.2 percent in the third as manufacturing and agricultural production accelerated.

South Africa’s growth outlook however remains uncertain, with a widening budget deficit and ballooning debt as well as trade wrangles between China and the United States posing big risks to an already modest growth forecast of 1.7 percent for 2019.

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For further information, please phone IHS Markit on +8006275 4800 or email

(Reporting by Mfuneko Toyana; Editing by John Stonestreet)

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.


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