South Africa's business downturn eases in February, S&P PMI shows
Business activity in South Africa continued to weaken in February, but the pace of contraction slowed compared with the start of the year, a survey showed on Wednesday.
The S&P Global South Africa Purchasing Managers’ Index (PMI) rose to 49 in February from 47.4 in January, remaining below the 50 line that separates growth from contraction for the third consecutive month.
The rate of decline in output, new orders, employment and inventories all slowed down.
"February data signalled a partial recovery in economic momentum in South Africa," said David Owen, senior economist at S&P Global Market Intelligence.
"This recovery appeared to be largely due to a softer contraction in business activity, as some firms experienced improved demand conditions and the resumption of projects."
New orders fell for the third month, with wholesale and retail sectors experiencing the sharpest declines. Export sales also dropped, albeit at the slowest rate in six months, partly due to reduced political unrest in neighbouring Mozambique.
Firms remained cautiously optimistic about future output, though there were concerns that US trade policy could dampen activity.
The PMI survey indicated that while the private sector's health weakened, it did so to a much lesser extent than in January, suggesting that firms generally expect conditions to recover soon.
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