South Africa Private Sector Activity Falls to 5-Month Low

The S&P Global South Africa PMI fell to 49.6 in May 2026 from 51.6 in April, slipping below the 50.0 neutral threshold for the first time in five months. The decline was driven by renewed contractions in output and new orders, with new business falling for the third time in four months and at the fastest pace this year. Wholesale and retail saw the steepest contraction, while services was the only sector to grow. Input cost inflation accelerated to its strongest level since July 2022, driven mainly by higher fuel prices. Firms passed these costs on to customers, pushing selling price inflation to a 46-month high across all sectors. Despite weaker demand, employment growth rose at the fastest pace since September 2022 as firms hired to fill vacancies. Looking ahead, business confidence rose to its highest level of 2026 so far, supported by strong project pipelines, planned advertising, and expectations of more stable market conditions over the coming year.

The S&P Global South Africa PMI rose to 51.6 in April 2026 from 50.8 in March, marking the strongest expansion since August 2022. Output growth accelerated to an 11-month high, supported by a rebound in sales and the fastest increase in new orders in over one-and-a-half years, partly driven by precautionary stock building amid concerns over the Middle East conflict. Employment growth also strengthened, reaching its highest level since September 2022. However, supply chain disruptions linked to the conflict led to a further deterioration in supplier delivery times, with lead times lengthening to the greatest extent in over one-and-a-half years. On prices, input cost inflation surged to a 30-month high, driven by rising fuel prices and higher supplier charges, prompting firms to raise output prices at the fastest pace since August 2024. Firms remained cautious about the outlook, noting that recent gains may be temporary amid ongoing geopolitical uncertainty and elevated cost pressures.

The S&P Global South Africa PMI rose to 50.8 in March 2026 from 50 in February, signaling the first upturn in business conditions for six months. Output increased at the quickest rate in six months, accompanied by stronger job creation and a first rise in input inventories since last November. However, signs emerged that heightened economic uncertainty and supply chain disruptions linked to the war in the Middle East had begun to weigh. New orders fell for a second month, accelerating as export sales dropped at the fastest rate in over two years. Delivery times lengthened to a 16-month high due to sea freight disruptions via the Strait of Hormuz. On the price front, input price inflation surged amid rising fuel costs, a stronger US dollar, and minimum wage changes, leading to the biggest increase in output charges in more than a year. Expectations for future activity weakened further, reaching their lowest level since July 2021.