Private sector contracts further in September

October 5, 2015 5:34 AM

The employment subindex fell below the 50 mark that separates expansion from contraction for the first time since May 2015 and was the second-largest contributor to the decline in the overall index.

A worker inspects cars at BMW's manufacturing plant in Rosslyn, outside Pretoria, September 13, 2010. REUTERS/Siphiwe Sibeko

South Africa's Standard Bank Purchasing Managers' Index (PMI) fell to a 14-month low of 47.9 in September from 49.3 in August as the weak economy took its toll on companies.

The survey, compiled by Markit and published on Monday, showed a continued contraction in output from South African private firms and lower new orders in September.

"We expect employment in the manufacturing, mining and construction sectors to be particularly impacted by lower commodity prices and slower domestic and global economic growth," said Kuvasha Naidoo, an economist at Standard Bank. South Africa's economy, the most developed on the continent,

is beset by constraints including electricity shortages and labour unrest, and contracted in the second quarter, the first decline in a year.