Johannesburg - Activity in South Africa's private sector declined in July, with output and new orders contracting the most in more than a year, a survey showed on Wednesday.
The Standard Bank Purchasing Managers' Index (PMI), produced by Markit, fell to 48.9 in July from 49.2 the month before, falling below the 50.0 threshold that divides expansion and contraction for the second consecutive month.
Downward pressure came from lower output and new orders, which companies attributed to a weaker economic environment and subdued demand.
The rate of increase in overall input costs faced by local companies was little changed during the month compared with June, although staff costs rose faster.
“Indications are that staff costs continue to rise, which may curb future hiring amid the manufacturing sector's current constrained growth environment,” said Walter de Wet, head of South Africa research at Standard Bank.
Africa's most advanced economy has struggled to grow meaningfully after a 2009 recession, and the slowdown has been aggravated by the worst electricity crunch since 2008.
REUTERS