Johannesburg - The private sector in South Africa grew only marginally in October, but dismal as the rate was, it was still the fastest in one-and-a-half years.
The Standard Bank purchasing managers’ index (PMI) has decreased marginally to 50.5 points in October, little changed from 50.7 points in September.
Readings above 50 points signal an improvement in business conditions on the previous month, while readings below 50 show a deterioration.
The survey, compiled by Markit, found that the headline PMI showed further improvement as output growth accelerated.
The PMI reveals new orders received by the private sector companies fell at the start of the fourth quarter.
However, the rate of contraction was slight overall, with the majority of the survey panel (72 percent) reporting no change since September.
“In contrast to a fall in total new business, South African private sector firms recorded an increase in new export orders for the first time in four months in October.
“The rate at which foreign demand improved was among the strongest since the first quarter of 2012, with more than one in 10 panellists noting an expansion.
“Fellow African countries were a main source of export growth, according to survey evidence.”
South Africa recorded its first quarterly trade surplus in a year in the three months to June as mining exports surged, helping to narrow the deficit on the current account, which is the broadest measure of goods and services, to 3.1 percent of gross domestic product from 5.3 percent.
Private sector employment growth was sustained at the start of the fourth quarter.
Standard Bank said the index registered above the 50 no-change mark for the fourth month running, although the latest reading indicated a slower rate of job creation. It said some companies hired additional workers in anticipation of rising demand.
The PMI found output price inflation in the private sector slowed for the fourth month running during October, as a result of competitive pressure, as well as a weaker rise in input costs.
Producer price inflation fell to 6.6 percent in September from 7.2 percent in August.
BUSINESS REPORT