July 5, 2017/Reuters

Activity in South Africa’s private sector fell to its lowest in 14 months in June as employment, output and new orders slipped, a survey showed on

Wednesday.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, dropped to 49.0 in June from 50.2 in May, below the 50 mark that separates expansion from contraction. The reading

was the index’s lowest since April 2016.

“The employment sub-component reflected the largest decline in June, followed by output and new orders. Stocks of purchases also fell, although its subtraction from the overall index was

more muted in June,” Standard Bank strategist Shireen Darmalingam said.

“We expect the index to remain pressured as the South African economy battles with low business confidence and slow economic activity as reflected in the recent recessionary (first

quarter) GDP data.”

Political instability, high unemployment and credit-rating downgrades have hit business and consumer confidence in South Africa, which entered recession for the first time in eight years in the first quarter.

Unemployment is at a 14-year high of 27.7 percent.