David Owen, an economist at IHS Markit, said the latest survey data represented another substantive deterioration in the private sector economy.
“Firms remain hopeful that the economy will pick up in the new year. Although, with stock levels falling at the fastest rate in over four years, they may find themselves unable to fulfil any upsurge in orders,” Owen said.
The SA Revenue Service said last week that the trade deficit widened to R5.5 billion in October. It was the largest trade gap since January, as imports rose faster than exports.
Meanwhile, the Merchantec chief executive confidence index released yesterday showed that business leaders were worried about next year's general election, with the index dipping 4 percent in the fourth quarter to 49 points, just below the neutral scoreline of 50 points.
Merchantec said the uncertain national election next year, which is expected to be the most hotly contested since 1994, was on the lips and minds of most chief executives.
“Chief executives expect that the economy will turn the corner a few months after the election, provided that President Ramaphosa gets to serve his first official term in office. There is a belief among chief executives that the president is taking bold steps to weed out corruption,” Merchantec said.
“While this plays out in the political arena, chief executives have indicated that they are holding back on further capital investment and are considering restructuring their operations to steer their businesses through political and economic unpredictability.”
The survey further found that 61.9 percent of the chief executives expressed a renewed positive sentiment over Tito Mboweni's appointment as finance minister, while 36.7 percent indicated that they did not believe that the appointment could provide the euphoria that South Africa experienced when Ramaphosa took the helm.