South Africa PMI Shows Sharpest Drop in 11 Months

The S&P Global South Africa PMI was unchanged at 50 in February 2026, signaling stable private-sector business conditions for a second consecutive month after weakness in late 2025. Output was broadly unchanged, supported by firms clearing backlogs, while new orders declined slightly. The continued fall in outstanding work pointed to a weaker pipeline and a cautious near-term outlook. Employment rebounded with a modest rise in staffing, though inventories declined again amid restrained purchasing. Supplier delivery times worsened slightly but delays were less severe than earlier in the year. Input cost pressures remained subdued thanks to a stronger rand and lower fuel prices, even as wage inflation hit a seven-month high. Softer overall cost burdens enabled firms to lower selling prices for the first time since May 2025. Business confidence eased to its lowest level since July 2021, despite expectations that easing inflation and potential rate cuts could support growth.

The S&P Global South Africa PMI rose to 50.0 in January 2026 from 47.7 in December, signaling a stabilization in private-sector business conditions after a weak fourth quarter. Output and new orders were broadly unchanged, as modest improvements in domestic demand were offset by continued weakness in services and falling export orders. Purchasing activity increased slightly on firmer demand momentum, while inventories declined as supplier delivery times lengthened for the first time in ten months due to port delays and weaker supplier performance. Backlogs continued to fall, and employment edged lower as firms reduced staff or paused hiring. On prices, input cost inflation slowed to a three-month low, allowing selling price increases to soften to their weakest pace since October. Despite challenges, business confidence stayed relatively upbeat, supported by expectations of stronger demand, improved energy supply, rising tourism, and better domestic economic conditions.

The S&P Global South Africa PMI fell to 47.7 in December 2025 from 49.0 in November, marking the fastest contraction since January. Business activity dropped sharply amid weaker client demand and challenging economic conditions, with output falling at the steepest pace in 11 months. New orders declined again, led by reduced household spending, pullbacks in business orders, and softer export demand while backlogs fell at the fastest rate in over five years. Firms responded by cutting purchasing activity and reducing input stocks, although employment edged higher for a third straight month due to short-term hiring. Supplier delivery times extended its record streak. Cost pressures eased slightly as input prices rose at a slower pace, prompting a softer increase in selling prices. Despite current weakness, business confidence remained elevated, with firms expecting a recovery in activity over the year ahead on hopes of stronger demand and new projects.