South Africa's private sector activity remained in contraction in October, weighed down by weak demand, rising fuel costs, and disruptions at port operations and maritime transport, according to a business survey released on Thursday, 5 November.

The S&P Global Purchasing Managers' Index (PMI) for South Africa held steady at 49.0 points in October, remaining below the 50-point threshold that separates expansion from contraction in economic activity.

"Perhaps the most concerning signal from the latest survey was the sharp drop in business confidence. Expectations for activity over the next 12 months fell to their lowest level since August 2020," said David Owen, chief economist at S&P Global Market Intelligence.

Output recorded a second consecutive decline, falling at the steepest pace since December, while new orders contracted again, although the rate of decline slowed significantly compared with September. External demand also retreated, doing so for the first time since May.

Cost pressures intensified during the month, with higher fuel prices pushing input cost inflation to its highest level since June. Firms passed part of these additional costs on to clients, driving selling price inflation to a four-month high.

Supplier delivery delays persisted against a backdrop of ongoing disruptions at the Port of Durban. Although companies continued, on average, to expect an increase in output over the next 12 months, business confidence deteriorated across all sectors.