Activity in South Africa’s private sector remained in growth territory for a sixth straight month in February as businesses saw a small rise in new orders, leading them to increase output and employment, a survey showed on Friday.
The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit edged lower to 50.5 from 51.3 previously, remaining just above the 50 mark dividing expansion from contraction.
While the figure marked the longest sequence of positive readings in nearly three years, it is still below the below the long-run survey average of 50.8 indicating businesses remained under pressure with exports in particular still subdued.
“New export orders remained in contractionary terrain but improved marginally reaching 47.3, in part due to the recent rand strengthening,” said economist at Standard Bank Thanda Sithole.
“Demand for domestic exports will remain under pressure should the rand strength persist in 2017,” Sithole said. South Africa’s rand hit its firmest in 18 months against the dollar in February, bringing gains compared to the same month in 2016 to more than 30 percent according to Thomson Reuters data.
The survey showed also showed the volume of outstanding business was broadly unchanged since January, a sign of a lack of pressure on operating capacity.
