South African Private Sector Activity Declines in June Amid Election Uncertainty

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JOHANNESBURG, July 3 (Reuters) – South Africa’s private sector activity decreased in June as output and new orders fell due to uncertainty surrounding the outcome of the May election, according to a survey released on Wednesday.

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The S&P Global South Africa Purchasing Managers’ Index dropped to 49.2 in June from 50.4 in May. A reading below 50 signals contraction.

On May 29, South Africans participated in a national election in which the African National Congress (ANC) lost its parliamentary majority for the first time since apartheid ended 30 years ago, leading to some financial market uncertainty.

The ANC decided to govern in a national unity government with 10 other political parties, with markets eagerly awaiting the announcement of President Cyril Ramaphosa’s cabinet throughout June.

“The PMI’s reading of 49.2, driven by significant declines in output and new orders, was mainly due to a temporary pause in customer spending as businesses awaited the general election outcome,” said David Owen, senior economist at S&P Global Market Intelligence.

Business conditions worsened due to the fastest decline in output in three months and a continuous drop in new order volumes for the fourteenth consecutive month.

“We may see a slight recovery in sales in July as firms return to normal activity,” Owen added.

By Naija247news
By Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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