South Africa Private Sector Returns to Growth

The S&P Global South Africa PMI rose to 50.5 in June 2026 from 49.6 in May, returning the private sector to marginal growth. Despite the improvement, output and new orders contracted for a second consecutive month, reflecting subdued domestic demand as firms continued to cite constrained client spending, economic uncertainty, and elevated price pressures, although the services sector remained the only category to record growth in new business. Business confidence also deteriorated, falling to its lowest level since July 2021 amid domestic political uncertainty and concerns over the Middle East conflict. Meanwhile, input cost inflation eased sharply from May's 46-month high, while output price inflation also moderated but remained elevated due to higher fuel and shipping costs. Employment continued to expand as firms hired both permanent and temporary staff to increase capacity, while supplier delivery times lengthened further as disruptions to imported shipments persisted.

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.