South African private sector activity growth slows in Nov - PMI
JOHANNESBURG, Dec 3 (Reuters) - South African private sector activity expanded at a slower pace in November as output dropped due to difficulties in acquiring basic materials, while weaker demand hit sales, a survey showed on Thursday.
IHS Markit's Purchasing Managers' Index (PMI) slipped to 50.3 in November from 51.0 in October - when it rose above the 50.0 line denoting expanding activity for the first time in 18 months.
IHS Markit said the output and new orders subindexes dropped below 50 to 49.7 and 49.5 respectively, however, pointing to renewed falls in activity and sales in the private sector.
Where drops in output were seen, firms often mentioned weaker demand from clients and disruption caused by the slower delivery of inputs, or raw materials, IHS Markit said.
"Global lockdown measures due to rising COVID-19 cases was also a drawback on sales. Firms particularly saw weaker demand from European clients as some countries tightened lockdown rules, leading to a solid fall in foreign orders," IHS Markit said in a statement.
South African firms had also struggled to acquire some inputs, most notably steel, IHS Markit said.
"This appeared to constrain industrial output, leading to a renewed fall in total private sector activity. New business volumes also slipped back, showing there are demand-side concerns as well that firms will hope to lessen towards the end of the year," David Owen, economist at IHS Markit, said.
On a positive note, the outlook for business activity hit a nine-month high amid hopes for coronavirus vaccines and an economic recovery in 2021. (Reporting by Olivia Kumwenda-Mtambo; Editing by Hugh Lawson)
