JOHANNESBURG (Reuters) – South Africa’s economic downturn extended into last month, though businesses still reeling from the impact of the COVID-19 pandemic reported slightly less steep in output and new orders, a survey showed on Wednesday.

The pace of job losses also slowed, but July still saw the third-fastest reduction in employment on record.

The IHS Markit Purchasing Managers’ Index (PMI) rose to 44.9 from 42.5 in June, its second increase in a row but still far below the 50 mark that separates expansion from contraction.

Africa’s most industrialised economy imposed a hard lockdown in late March to contain the spread of the coronavirus. It has gradually eased curbs on most economic activity since.

The July reading was the 15th in succession below 50, showing the downturn began well before the pandemic.

David Owen, economist at IHS Markit, said: “Businesses that remained closed or under working-from-home policies continued to report a weak level of sales, with exports also falling steeply.”

This led to a further cut-back to output, and further job losses.

“However, some firms are beginning to operate closer to normal capacity and are seeing an increase in demand. As lockdown restrictions are loosened, we expect more firms to move towards a recovery,” he said.

South Africa has recorded more than a half a million cases of COVID-19, the most in Africa, with the number of infections continuing to rise rapidly in recent weeks.

Government forecasts are for gross domestic product to shrink by at least 7% this year.