South Africa Private Sector Contracts in September

The S&P Global South Africa PMI fell to 49.0 in September 2026 from 50.5 in August, signalling a renewed contraction in private sector activity and the weakest performance so far this year. The downturn was driven by a sharp decline in new orders, which fell at the fastest pace in two-and-a-half years amid uncertainty over economic conditions and higher fuel prices. Weaker demand also prompted firms to cut purchasing and inventories, while employment remained broadly stable. Higher fuel costs pushed input prices up sharply, although softer wage growth eased overall cost inflation. Output prices rose at the fastest pace since June as firms passed on higher costs. Supply chain pressures intensified, with supplier delivery times lengthening at the fastest rate since February 2024, partly due to delays at the Port of Durban and Middle East disruptions. Looking ahead, business expectations improved to a four-month high, supported by optimism over demand and expansion plans.

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.