South Africa's private sector activity remained in December as output, demand and employment stabilized, survey data from IHS Markit showed on Wednesday.
The purchasing managers index, or PMI, fell to a three-month low of 50.2 in December from 50.3 in November. A reading above suggests growth in the sector.
New orders were largely unchanged due to weak demand for exports. Output levels also stabilized partly due to shortages in supply of raw materials due to the coronavirus restrictions.
Employment dropped at the weakest pace in nine months, while backlogs grew for the first time since April.
Cost inflation was the lowest in four months, but remained solid. Business expectations, though positive, was the weakest since August.
"While PMI data over the fourth quarter of 2020 points to an easing to the downturn, demand indicators suggest that the economy has far to go to recover from the pandemic," IHS Markit economist David Owen said.
"Moreover, should restrictions be reimposed, the country could face a second decline in activity over the first quarter of 2021."
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