JOHANNESBURG, Jan 4 (Reuters) – South African private-sector economic activity contracted for a fifth consecutive month in December as factory output and new orders fell, a survey showed on Thursday.
The Standard Bank Purchasing Managers’ Index (PMI), compiled by IHS Markit, fell to 48.4 in December from 48.8 in November, staying below the 50 mark that separates expansion from
contraction for a fifth straight month. It was the lowest reading April 2016.
Lack of demand and therefore output led companies to continue to cut workforce numbers, purchasing activity and inventories. The country shed 83 000 formal jobs between
September 2016 and September 2017, Statistics South Africa said in December.
A reduction in business activity was the main influence over the decline in business conditions, the survey said.
Contractions in output were linked to a lack of client demand and challenging market conditions, it said.
Africa’s most industrialised economy emerged from a recession in the second half of 2017, but growth is expected to remain subdued following credit downgrades to “junk” by S&P Global and Fitch. Business and consumer confidence remain at record lows.