In March, economic activity in the private sector of South Africa decreased, according to a survey issued on Wednesday. This was owing to the consequences of inflationary pressures as well as recurrent power disruptions.
The S&P Global South Africa Purchasing Managers’ Index (PMI) dropped to 49.7 in March from 50.5 in February, dropping below the threshold of 50 that distinguishes growth from contraction.
According to David Owen, a senior economist at S&P Global Market Intelligence, “output returned to contraction after stabilizing in the previous month,” as enterprises pointed out that continued load shedding (power cuts) had slowed activity.
Eskom is currently implementing the longest rolling blackouts in the country’s history, leaving households and businesses without power for up to ten hours every day.
Latest price numbers, according to Owen, indicate that the nation could be facing another wave of inflation, with business prices rising at the quickest rate since July 2022.
“Weak exchange rates, higher gasoline expenses, and poor supply chain conditions contributed to a substantial increase in purchasing prices,” he stated. “Weakness in the supply chain was also a factor”
Yet, a number of companies have reported an uptick in sales, which provides some cause for optimism. In addition, confidence levels have grown for the first time in the past half a year, as mentioned by Owen.
