Better exports boosted private sector output in October although the growth was at a slower pace than the previous month‚ while new business has declined.
Business activity increased at the fastest pace in 18 months and was supported by the solid rise in new export business.
New orders fell from expansion into contraction but the data suggested a strong pickup in new export orders which rebounded six points in October.
The Standard Bank-sponsored Purchasing Managers’ Index‚ compiled by Markit and published on Thursday‚ slipped to 50.2 on the index from 50.7 in September. This reading shows the second successive monthly improvement in operating conditions.
A reading above 50 indicates an improvement in business conditions on the previous month and readings below show a deterioration.
Markit found that employment continued to expand although at a slower pace than in September.
The survey also revealed that competition and subdued cost inflation‚ however‚ led to the weakest increase in selling prices since July 2011‚ when data collection began. The latest survey data highlighted ongoing pressure on supply chains.
Markit also found that companies generally remained cautious about their stock policies. However‚ some firms raised their purchasing activity amid signs of rising demand.
Kuvasha Naidoo‚ Standard Bank economist said the leading PMI indicator remained above 1 for the third consecutive month. “But with both new orders and stocks of purchases printing below 50 points in October‚ it is uncertain what this means in terms of expansion in the private sector in the quarters to come‚” she said.