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
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