South African private sector activity rose slightly in January as the Omicron wave of Covid-19 cases receded, lifting demand and stabilising new business, a survey showed on Thursday.
IHS Markit’s Purchasing Managers’ Index (PMI) rose to 50.9 in January from 48.4 in December, slightly back above the 50 neutral mark into expansionary territory.
“The latest PMI data suggested an improvement in demand conditions in South Africa during January, as the Omicron wave of Covid-19 receded and clients began to spend again,” said David Owen, Economist at IHS Markit.
Still, supply chain challenges remained acute, with a number of businesses struggling to stock the inputs they need whilst facing sharp inflationary pressures for materials and transport.
Looking ahead, Owen added that business optimism was strengthened by hopes that the economy will cope well with any future waves of the pandemic, particularly as hospitalisations and deaths were much lower with the Omicron variant in spite of minimal government measures.
The rapid decline in the Omicron wave prompted a surge in business optimism to the highest in just over seven years, amid greater promise that economic conditions will be less affected by the pandemic in 2022.
South Africa no longer requires those who test positive for Covid-19 without symptoms to isolate and has also reduced the isolation period for those with symptoms by three days, as the country exits its fourth wave of the coronavirus.