S.Africa's private sector activity falls to 2-1/2 year low in August -PMI
JOHANNESBURG, Sept 5 (Reuters) - South African private sector activity contracted in August to its lowest in over two years as output and new orders plunged amid rising policy and political uncertainty, a survey showed on Wednesday.
The Standard Bank Purchasing Managers' Index (PMI), compiled by Markit, tumbled to 47.2 in August from 49.3 in July, its lowest in 29 months.
Africa's most industrialised economy entered recession in the second quarter for the first time since 2009, data showed on Tuesday, another blow to President Cyril Ramaphosa's efforts to revive it after a decade of stagnation.
Participants in the survey cited political as well as economic issues, affordability constraints, inflationary pressures and worker strikes as factors for the depressed activity.
Pretoria plans to expropriate land without compensation to redress racial disparities in ownership, but investors are concerned about wider threats to property rights. This nervousness was partly reflected by the rand currency's recent sensitivity to the mooted reforms.
The rand had already been battered by a massive emerging market selloff, falling more than 15 percent since the beginning of August as financial crises in Turkey and Argentina soured risk sentiment across the board.
"The poorly performing PMI reflects economic policy uncertainty, increased cost pressures from elevated oil prices, rand weakness and labour strikes," Standard Bank economist Thanda Sithole said.
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(Reporting by Nomvelo Chalumbira; Editing by Catherine Evans)
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