SA business activity shrinks in December as Transnet woes persist
S&P Global SA PMI falls to 49 from 50 a month earlier
04 January 2024 - 10:05
by Agency Staff
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Private sector activity in SA shrank in December as companies signalled the impact of worsening backlogs at the country’s ports, according to a survey published on Thursday.
The S&P Global SA Purchasing Managers’ Index (PMI) fell to 49.0 in December from 50.0 in November. A reading above 50 indicates growth in activity.
Supply chains, inventories, output and demand were all hit by the port crisis in Durban, with delivery times lengthening at the sharpest rate in almost two years, the survey shows.
“The port gridlock is likely to further dent the economy at the start of 2024 as businesses face greater shortfalls in input supply,” said David Owen, senior economist at S&P Global Market Intelligence.
Load-shedding by Eskom is also expected to remain an issue after electricity outages reportedly hit output and sales in December, he added.
Equipment shortages and maintenance backlogs after years of underinvestment as well as vandalism and theft has left port and freight rail operator Transnet struggling to provide adequate services.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
SA business activity shrinks in December as Transnet woes persist
S&P Global SA PMI falls to 49 from 50 a month earlier
Private sector activity in SA shrank in December as companies signalled the impact of worsening backlogs at the country’s ports, according to a survey published on Thursday.
The S&P Global SA Purchasing Managers’ Index (PMI) fell to 49.0 in December from 50.0 in November. A reading above 50 indicates growth in activity.
Supply chains, inventories, output and demand were all hit by the port crisis in Durban, with delivery times lengthening at the sharpest rate in almost two years, the survey shows.
“The port gridlock is likely to further dent the economy at the start of 2024 as businesses face greater shortfalls in input supply,” said David Owen, senior economist at S&P Global Market Intelligence.
Load-shedding by Eskom is also expected to remain an issue after electricity outages reportedly hit output and sales in December, he added.
Equipment shortages and maintenance backlogs after years of underinvestment as well as vandalism and theft has left port and freight rail operator Transnet struggling to provide adequate services.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.