Page 13 - AfrElec Week 45 2022
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AfrElec POLICY AfrElec
Industrial action,
electricity shortage derail
South Africa’s economy
SOUTH AFRICA STRIKES, electricity shortage and high infla- shedding, port delays and heightened operating
tion hit South Africa’s economy in October, S&P costs.”
Global (S&P) says. An electricity shortage caused by constant
The electricity shortage disrupted production breakdowns of ageing thermal plants, vandal-
while labour unrest at rail and ports manage- ism of infrastructure and increased demand dis-
ment utility, Transnet lengthened delivery times rupted South Africa’s economy in October as it
of cargoes, dampening economic activity and has done since 2007. An 11-day strike for higher
demand in Africa’s most developed economy. wages by Transnet workers worsened business
“The S&P Global South Africa Purchasing conditions. The industrial action had an imme-
Managers’ Index (PMI) - a composite gauge diate impact on frustrating cargo movement and
designed to give a single-figure snapshot of oper- backlogs at ports will have an effect into the final
ating conditions in the private sector economy quarter of the year, said S & P.
– registered 49.5 in October, signalling a slight Output declined in October due to weaker
contraction in the health of the private sector for demand and capacity cuts, with the latter due to
the second month running,” the agency said in a load shedding, port delays and heightened oper-
release on November 3. ating costs. The downturn was most evident in
“The index ticked up from 49.2 in September. the wholesale, retail, construction and services
The Output sub-index had the largest negative sectors. However, export sales improved.
influence on the PMI in October, indicating a Firms have a positive view of the next 12
solid decrease in private sector activity. Despite months, with 53% of businesses that S & P
easing from September, the pace of contraction surveyed projecting an expansion in output.
was the second-fastest in 2022 so far. Businesses The positive prognosis will, however, depend
linked the reduction to both weaker demand on lower inflation and improved electricity
and capacity cuts, with the latter due to load supply.
Week 45 09•November•2022 www. NEWSBASE .com P13
