South African private-sector activity shrinks in January: survey

JOHANNESBURG, Feb 5 (Reuters) – South African private sector activity shrank in January due to declines in output, new orders and exports, even though the rate of deterioration in business conditions eased from December, a survey showed on Monday.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, rose to 49.0 in January from 48.4 in December, staying below the 50 mark that separates expansion from contraction.

“The private sector PMI for January 2018 indicated that domestic business conditions continued to deteriorate albeit at a slower rate,” Standard Bank economist Thanda Sithole said.

“In our view, the uptick in the private sector PMI toward the 50-point mark is in itself a positive signal and we expect continued uptick over the coming months premised on improved economic optimism following the improving domestic political backdrop.”

Investor confidence in South Africa has improved since Deputy President Cyril Ramaphosa was elected the new leader of the governing African National Congress party in December, succeeding President Jacob Zuma.

Ramaphosa has promised to fight corruption and deliver economic policy change.

Mark

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