South Africa Private Sector Expands in July

The S&P Global South Africa PMI edged up to 50.5 in August 2026 from 50.3 in the prior month, signalling a slight improvement in the private sector’s health. The upturn was supported by a return to growth in new orders, which increased for the first time in four months, albeit marginally, as customer finances improved. Meanwhile, export sales rose only marginally and hit a three-month low, as economic challenges and domestic political uncertainty continued to weigh on demand. The pickup in new business supported higher output and purchasing activity, but persistent cost pressures prompted another decline in employment, the first in seven months. On the price front, input cost inflation accelerated in August, although it remained well below its May peak. Output prices also increased solidly, with the rise slightly stronger than July’s five-month low but still below the historical trend. Looking ahead, South African firms showed greater confidence in future activity levels.

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.