S&P 500 struggles for direction as investor await inflation data
Investing.com -- South African private sector activity contracted for the second consecutive month in November, according to the latest S&P Global South Africa Purchasing Managers’ Index (PMI).
The headline PMI registered at 49.0 in November, up slightly from 48.8 in October but still below the 50.0 threshold that separates growth from contraction. The reading indicates a marginal deterioration in business conditions.
Output and new business volumes continued to decline at similar rates to October, with firms reducing activity amid challenging economic conditions and a shortage of new orders to replace completed work. The output contraction, while modest, marked the fastest downturn in eight months.
Despite a renewed increase in international sales, total new business levels fell as companies reported difficult domestic conditions. Performance varied across sectors, with industry and construction experiencing reductions while services and wholesale & retail saw better demand.
Price pressures intensified significantly in November, with input costs rising at the fastest pace in over a year. Both purchase prices and wage costs increased more rapidly than in October, prompting firms to raise their output charges to the greatest extent since February.
Supplier delivery times continued to improve for the eighth consecutive month, though at a less pronounced rate than October’s survey record. While some respondents noted increased supplier capacity due to weaker demand, these gains were partly offset by material shortages, shipping disruptions, and courier backlogs.
Employment continued to grow in November, albeit at a slower pace than the previous month. Purchasing activity showed little change, which was still an improvement from October’s decline.
Business confidence improved notably, with expectations for future activity reaching a 12-month high. Nearly half of surveyed companies (46%) forecast increased activity over the coming year, citing new business opportunities and improved prospects for both the broader economy and market share expansion.
"The October and November PMIs suggest that Q4 may be a softer one for the South African economy, particularly if December figures also come below-par," said David Owen, Senior Economist at S&P Global Market Intelligence. "The risk will be whether the uptick in price pressures observed in November is sustained, a factor that could hit business margins and customer demand."
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