South African business activity flatlines in November -PMI

JOHANNESBURG (Reuters) – South African private sector business activity flatlined in November, with a cooling of price pressures counteracted by supply chain disruptions due to a port crisis, a survey showed on Tuesday.

The S&P Global South Africa Purchasing Managers’ Index (PMI) rose to 50.0 in November from 48.9 in October. A reading above 50 shows growth, below 50 reflects a contraction and 50 is considered neutral.

Both input costs and output charges rose at their softest rates since December 2020 and the cooling of price pressures supported weaker falls in output and new orders, S&P said.

However supply chain disruptions continued in November due to a port crisis and many firms faced longer waits for their inputs, the survey showed.

“Downside risk is now arising from the port crisis in Durban, where tens of thousands of shipping containers are awaiting offloading, causing significant delays,” said David Owen, senior economist at S&P Global Market Intelligence.

“The crisis could therefore act as a drag on private sector growth in the coming months if there is no improvement.”

State-owned rail and port firm Transnet has struggled to provide adequate freight rail and port services in South Africa due to equipment shortages and maintenance backlogs after years of underinvestment.

(Reporting by Bhargav Acharya; Editing by Susan Fenton)