JOHANNESBURG (Reuters) -Business conditions in South Africa's private sector improved for the fifth month running in September, buoyed by a rise in output and new orders, S&P Global reported on Friday.
The Purchasing Managers' Index (PMI) edged up to 50.2 in September from 50.1 in August, indicating a mild improvement in the sector's health. PMI readings above 50 signal growth, while those below indicate contraction.
The uptick in activity was underpinned by a sustained easing of cost pressures, with
input prices rising at their slowest rate in nearly a year.
Only 3% of surveyed firms reported a month-on-month increase in costs, aided by a favourable exchange rate against the U.S. dollar and lower headcounts.
Despite the positive momentum, business expectations for the year ahead fell to their lowest level since July 2021, with concerns over economic and political uncertainty cited for dampening sentiment.
"Another softening of price pressures in September is a further boon to South African companies, suggesting that CPI inflation could decline again from its recent high in July," said David Owen, Senior Economist at S&P Global Market Intelligence.
Headline consumer inflation in Africa's largest economy fell to 3.3% year-on-year from 3.5% in July, lower than the 3.6% forecast of economists polled by Reuters.
Employment levels continued to fall for the second consecutive month, attributed largely to difficulties in finding staff replacements. However, the rate of job losses slowed compared to August.
The survey also highlighted an improvement in export orders for the first time since March, driven by stronger demand from African markets, which offset weaker orders from the U.S. and Europe.
Supply chain conditions showed signs of improvement, with delivery times shortening for the sixth consecutive month, the longest sequence of improvement in the survey's history.
(Reporting by Johannesburg bureau;Editing by Toby Chopra)
