JOHANNESBURG, April 7 (Reuters) – South Africa’s private sector activity expanded marginally in March, as growth in business output slowed while new orders fell again, a survey showed on Wednesday.

IHS Markit’s Purchasing Managers’ Index (PMI) rose slightly to 50.3 from 50.2 in February, remaining above the 50 level that indicates expansion for the sixth month in a row.

“Business output continued to expand at the end of the first quarter of 2021 …However, with many respondents seeing a drop in client demand, the rate of expansion slowed and was only slight,” IHS Markit said in a statement.

Growth in the output index slowed to 50.3 in March from 50.5 in February, while the new orders index fell for a fifth consecutive month to 49.6 due to the impact of the COVID-19 pandemic.

“Additional supply concerns may constrain activity further in the coming months, before the global COVID-19 vaccine roll-out can restore business confidence and global demand later in the year,” IHS Markit economist David Owen said.

South Africa is Africa’s hardest-hit country in terms of recorded coronavirus cases and deaths, while its vaccination programme has so far lagged wealthier nations – raising prospects of tighter lockdown restrictions should infections rise rapidly again.

The economy contracted by 7% in 2020, its worst annual decline in a century, after the virus disrupted activity.

(Reporting by Olivia Kumwenda-Mtambo; editing by John Stonestreet)