JOHANNESBURG (Reuters) – South African private sector activity expanded at a steady rate in February compared with January, supported by an uptick in output and new orders, a survey showed on Thursday.
IHS Markit’s Purchasing Managers’ Index (PMI) stood at 50.9 in February, unchanged from January, remaining above the 50 neutral mark into expansionary territory.
“The latest PMI data showed that sales had picked up since the start of the year.
Following the impact of the Omicron COVID-19 wave, firms reported an upturn in client demand as well as an easing in supply chain pressures,” said David Owen, Economist at IHS Markit.
“However, the strong rate of input cost inflation forced businesses to raise their selling prices sharply in February, marking the fastest rise in charges for nine months, and the second-quickest since June 2016.”
Looking ahead, most firms remained confident that activity levels would improve over the coming year, although price pressures could hinder growth to some extent, Owen said.
South Africa’s producer price inflation is at record highs and risks associated with energy prices are elevated: domestic fuel prices are at all-time highs as global oil prices rise, while the energy regulator has granted power utility Eskom an overall average tariff increase for the 2022/23 financial year of 9.61%.
(Reporting by Olivia Kumwenda-Mtambo; Editing by Hugh Lawson)
