South African business activity shrinks solidly in January
JOHANNESBURG (Reuters) - Activity in South Africa's private sector in January contracted a its fastest pace since the end of 2021 as new orders fell due to rolling power cuts and weak economic conditions, a survey showed on Friday.
S&P Global's South Africa purchasing managers' index (PMI) contracted to 48.7 in January from 50.2 in December. Readings below 50 indicate a contraction in activity.
"The South African economy suffered a fresh downturn at the beginning of 2023, driven by a stronger decline in new business inflows that was the most marked in just over a year," David Owen, economist at S&P Global Market Intelligence, said.
Another round of power outages caused further disruption to supply chains and curtailed business activity, S&P said.
Struggling state utility Eskom has implemented power cuts every day this year, after a record number of days with outages in 2022.
Despite that, firms remained broadly optimistic regarding the 12-month outlook, with over half of all respondents expecting activity to grow, S&P added.
(Reporting by Anait Miridzhanian; Editing by Toby Chopra)