South African private-sector activity expanded at a slower pace in March compared with February as the rate of increase in output and new orders eased, a survey showed on Thursday.
The Standard Bank Purchasing Managers' Index (PMI), compiled by IHS Markit, fell to 51.1 in March from 51.4 in February, staying above the 50 mark that separates expansion from contraction.
"Supporting the overall improvement was an increase in business activity, with the latest data marking the second consecutive month of output growth. That said, the rate of expansion was only modest and had softened from February," IHS Markit said in a statement.
The rate of growth in the output index eased to 51.0 in March from 51.3 in February. New orders dropped to 50.9 from 51.6.
Standard Bank economist Thanda Sithole said the PMI was expected to continue reflecting signs of improving domestic business conditions.
"This is premised on the improved political landscape alongside positive interventions in state-owned enterprises to restore good governance, cabinet renewal in key government positions and recently the Moody's decision to preserve (the) investment-grade rating and change the rating outlook from negative to stable," Sithole said.
"The recent 25 basis points interest rate cut by the (central bank) should provide further impetus to domestic demand."
Investor confidence in the South African economy has improved since late December, when President Cyril Ramaphosa succeeded scandal-plagued Jacob Zuma as head of the ruling African National Congress party. Ramaphosa was appointed head of state following Zuma's resignation in February.
- Reuters
