South African private sector activity fell to a record low in March, a business survey showed on Friday, as the global coronavirus pandemic led to the sharpest drop in output and new orders the survey has ever recorded.
IHS Markit’s Purchasing Managers’ Index (PMI) was at 44.5 in March from 48.4 in February, remaining below the 50 level that separates expansion from contraction.
IHS Markit said the index reading was a record low for the series and signalled worsening business conditions for the 11th straight month.
“Central to the decline were large drops in the output and new orders sub-components, also to record lows, with stocks of purchases likewise contracting at a faster pace,” IHS Markit said in a statement.
The output sub-index fell to 37.3 in March from 46.4 in February, while the new orders one slipped to 39.6 from 47.8.
South Africa has imposed some of the toughest restrictions on the continent to try to contain the coronavirus outbreak.
The lockdown is set to take a toll on an economy already in recession.
“March data captured the period before the total lockdown at the end of the month, signalling we may be at the precipice of an even deeper recession than currently predicted by the PMI,” said David Owen, an economist at IHS Markit.
“Demand in domestic markets fell drastically as consumers and firms cut back on new expenditure and travel, while export sales also declined at a record pace. Despite this, businesses reduced employment only slightly, though there may be a much larger round of job losses in April as the lockdown takes effect.”
– Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.