South Africa business activity grows in Aug for first time in six months -PMI

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South African private sector activity grew for the first time in six months in August as improved demand led to firms boosting output, a survey showed on Tuesday.

The S&P Global South Africa Purchasing Managers' Index rose to 51.0 in August from 48.2 in July. A reading above 50 shows growth.

Overall business costs rose at the slowest rate since January, leading to a slower increase in firms' output charges, the survey showed. "The August South Africa PMI pointed to an encouraging turnaround in the private sector economy... as companies reported an increase in output... and demand conditions were broadly steady," said David Owen, economist at S&P Global Market Intelligence.

However, Owen warned that domestic factors such as rolling power cuts by state power utility Eskom, the weakness in the local rand currency, and supply disruptions continued to be hindering factors for growth. "August's upturn does little to turn the tide after a dismal performance in 2023 so far. Progress on these issues would certainly prove beneficial to South African companies in the latter part of this year," he said.

 

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