JOHANNESBURG (Reuters) – South African private sector activity fell in June as output and new orders slipped on uncertainty over the outcome of an election held in May, a survey showed on Wednesday.
The S&P Global South Africa Purchasing Managers’ Index fell to 49.2 in June from 50.4 in May. A reading below 50 indicates contraction.
South Africans voted in a national election on May 29, which saw the African National Congress lose its parliamentary majority for the first time since the end of apartheid 30 years ago, creating some uncertainty in financial markets.
The ANC opted to rule in a government of national unity with 10 other political parties and markets spent much of June awaiting the composition of President Cyril Ramaphosa’s cabinet.
“The PMI’s print of 49.2, linked to sharper falls in output and new orders, was largely due to a temporary pause in customer spending as businesses awaited the outcome of the general election,” said David Owen, senior economist at S&P Global Market Intelligence.
Business conditions deteriorated on the quickest fall in output in three months and a drop in new order volumes for the fourteenth month in a row.
“We may see a slight recovery in sales in July as firms return to normal activity,” Owen said.
(Reporting by Tannur Anders; Editing by Christina Fincher)
