Johannesburg - Business operating conditions in South Africa's private sector remained constrained in August, with output and new orders declining further as companies scaled back their purchasing activity, a survey showed on Thursday.
The Standard Bank Purchasing Managers' Index (PMI), produced by Markit, edged up just slightly to 49.3 in August from 48.9 in July, holding below the 50.0 mark that signals an expansion for the third month in a row.
The main downward contribution to the headline number came from a further decline in new business.
“The private sector is facing rising electricity costs and slowing growth both domestically and internationally, as reflected in the intensification of the contraction in the new export orders index,” Standard Bank economist Kuvasha Naidoo said.
“The private sector is in recession and signals from the PMI's leading indicator suggest ongoing deterioration.”
Africa's most industrialised economy contracted in the second quarter of this year, after electricity shortages and labour disputes hit output from the key mining and manufacturing sectors.
REUTERS