- The private sector’s activity in South Africa somewhat improved despite poor electricity.
- Most businesses surveyed expected output to increase next year due to predictions that power outages would lessen.
In November, the private sector’s activity in South Africa somewhat improved. Nevertheless, a survey revealed that output decreased for the third consecutive month due to port strikes and rotational power outages.
The purchasing managers’ index (PMI) for South Africa, published by S&P Global, increased to 50.6 in November from 49.5 in October, crossing the 50.0 line that separates activity expansions from contractions.
Data from November indicated that sales had increased for the first time since August, which was a significant factor in the reversal.
“Supply chains remained disrupted by load shedding (power cuts) and the recent strikes at Transnet, leading to a further sharp lengthening of delivery times. Backlogs were also up, encouraging a renewed expansion in staffing levels,” said David Owen, an S&P Global Market Intelligence economist.
For over ten years, frequent power outages have been the misery of South African residents and companies. However, this year has been terrible because the state electricity company Eskom has had trouble keeping the lights on for longer.
According to the study, half of all businesses surveyed expected output to increase during the upcoming year due to predictions that power outages would lessen and price constraints would continue to relax.