Dire data points to no quick haul out of recession
The recovery from SA’s first recession since 2009 is likely to be very slow, data measuring private sector activity indicated. According to Standard Bank’s Purchasing Managers’ Index (PMI), private sector activity slipped to its lowest level in more than two years in August. The index is based on data about new orders, employment and operational costs compiled from purchasing executives in about 400 private sector companies in the manufacturing, mining, services, construction and retail sectors. The dip was driven by policy uncertainty, increased cost pressures from elevated oil prices, rand weakness and labour strikes, said Standard Bank economist Thanda Sithole. This comes after GDP numbers from Stats SA on Tuesday showed SA had entered a recession in the second quarter for the first time since 2009, another blow to President Cyril Ramaphosa’s efforts to revive the economy. GDP contracted 0.7% in the second quarter, following a 2.6% decline in the previous three months.