Private sector activity shrank in December as companies signalled a greater effect on business amid the gridlock afflicting the country's ports, a survey showed on Thursday.
The S&P Global South Africa Purchasing Managers' Index (PMI) fell to 49.0 in December from 50.0 in November. A reading above 50 indicates growth in activity.
Supply chains, inventories, output and demand were all hit by the port crisis in Durban, with delivery times lengthening at the sharpest rate in almost two years, the survey showed.
“The port gridlock is likely to further dent the economy at the start of 2024 as businesses face greater shortfalls in input supply,” said S&P Global Market Intelligence senior economist David Owen.
Rotational power cuts implemented by Eskom are expected to remain an issue after outages reportedly hit output and sales in December, he added.
Equipment shortages and maintenance backlogs after years of underinvestment have meant Transnet has struggled to provide adequate freight rail and port services.
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