Johannesburg - Business activity in South Africa's private sector stabilised in February after shrinking for two months, a survey showed on Wednesday, with falling fuel prices offering companies some respite.
South Africa's HSBC Purchasing Managers' Index (PMI) inched up to 50.0 in February from 49.8 in January. A reading above 50 marks growth in activity while a reading below shows a contraction.
Companies reported new clients but virtually the same level of new orders as in January, restraining any meaningful expansion in business activity, HSBC said.
“February's survey results send mixed signals about the health of South Africa's private sector economy,” said Oliver Kolodseike, an economist at financial information services firm Markit, which helped compile the survey.
“New orders stabilised as falling fuel prices exerted some downward pressure on input costs. The respective survey measure for input prices continued to signal inflation, but fell to its lowest in the series history.”
Overall input costs for private companies continued to rise, a trend dating back to July 2011, but were tempered by easing inflation.
The survey also showed that companies reduced their workforces for the first time since July 2014, albeit only marginally, with some firms linking the job losses to efforts to cut costs.
Reuters