South Africa Private Sector Expands in July

The S&P Global South Africa PMI edged down to 50.3 in July 2026 from 50.5 in June, signaling a further, albeit slower, marginal improvement in private sector business conditions. Business activity returned to growth for the first time in three months, supported by easing inflationary pressures and improved operational efficiency. However, new orders contracted for a third consecutive month as weak consumer demand, political protests, and competition from cheaper imports continued to weigh on sales, although export demand rose for a second straight month. Meanwhile, input cost inflation slowed to a four-month low and fell below its long-run average, helped by lower fuel prices and softer wage growth, while output price inflation eased to its weakest pace in five months. Employment growth also slowed to a six-month low, with firms reducing hiring amid subdued demand and persistent supply chain disruptions. Business confidence improved from June's near five-year low.

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.