The regularity of planned power outages by Eskom, often escalated to stage six or two spells of four and a half hours of load-shedding every day, drove manufacturing output down for the fourth consecutive month in December, Standard & Poors (S&P) has found.
In the latest S&P Global South Africa Purchasing Managers Index (PMI), the credit ratings agency said load-shedding had contributed to a decrease in export sales by manufacturers.
Whereas S&P’s PMI for SA was at .6 above the 50-point median measure for November, December’s PMI fell to 50.2.
According to Trading Economics, it marks weaker growth in private sector activity, as new orders fell for the third time in four months.
“Export orders further dropped because of slowing international demand,” the data service adds.
“Output levels also decreased for the fourth consecutive month, linked to lower sales and power cuts due to load-shedding.”
Exacerbating matters for manufacturers was the sharp spike in input prices, marginally mitigated by a year-on-year softening of inflation rates.
“Purchase costs continued to climb amid supplier shortages, higher fuel prices and currency weakness, but the rate of inflation was the softest for almost two years.”
The comparatively better inflation environment translated into optimism about the prospects for improved business activity, resulting in relatively strong levels of job creation in September, Trading Economics says.
