Business output falls as load shedding bites

Private sector activity recovered slightly in November, but output fell for the third straight month, weighed down by rotational power cuts and port strikes, a survey showed on Monday.

S&P Global’s South Africa purchasing managers’ index (PMI) rose to 50.6 in November from 49.5 in October, above the 50.0 line that divides expansions in activity from contractions.

The turnaround was largely due to an increase in new business volumes, with data in November suggesting a rise in sales for the first time since August.

“Supply chains remained disrupted by load shedding 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, economist at S&P Global Market Intelligence.

Regular power cuts have been a bane of businesses for more than a decade, but this year has been particularly bad as Eskom has struggled to keep lights on for longer periods of time.

Half of all surveyed firms predicted output to expand over the next year, amid expectations that disruption from power cuts would ease and price pressures would continue to soften, the survey said.  — Bhargav Acharya, (c) 2022 Reuters

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