According to a study released on Wednesday, the private sector’s economic activity in South Africa shrank in March as a result of periodic power outages and inflationary pressures.
The “PMI” index dropped below the 50-point threshold that separates expansion from contraction in March, dropping to 49.7 from 50.5 in February.
According to enterprises that noted that continued load shedding (power outages) had slowed down operations, output shrank again after stabilizing in the previous month, according to David Owen, the senior economist at S&P Global Market Intelligence.
The largest rolling power outages in history are being implemented by the state-owned power company Eskom, leaving homes and businesses in the dark for as much as 10 hours every day.
The UK may be set for another round of inflation, according to Owen, since corporate prices are rising at their quickest rate since July 2022.
“Weak supply chain circumstances, greater gasoline costs, and exchange rate weakness contributed to a sharp increase in purchasing prices,” stated David Owen.