Filomena Scalise

Johannesburg - South Africa's private sector kept shrinking in May as a five-month strike at the country's platinum mines depressed output and new orders, a business survey showed on Wednesday.

HSBC's Whole Economy Purchasing Managers' Index (PMI) rose to 49.7 in May from 49.4 in April as output and new orders, which make up 55 percent of the index sub-components, stayed below the 50 mark denoting growth for the third straight month.

The Association of Mineworkers and Construction Union (AMCU) is considering a government proposal to resolve the mining strike, which helped push South Africa's economy into contraction in the first quarter of the year.

“While the pace of contraction (in the PMI) eased slightly, and new export orders were unchanged, it is apparent that demand will remain stifled without resolution to the mining strike,” said David Faulkner, an economist at HSBC.

Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence. - Reuters