South Africa Private Sector Remains in Contraction in October

The S&P Global South Africa PMI held steady at 49.0 in October 2026, remaining below the 50.0 threshold for a second consecutive month and signaling continued weakness in private sector activity. Output declined at its fastest pace since December 2025, as subdued demand, higher fuel costs and transport disruptions weighed on business operations. New orders continued to fall, although at a slower pace than in September, while export demand weakened for the first time since May. Employment declined for a third consecutive month, recording its steepest drop in six years. Meanwhile, rising fuel costs drove purchasing cost inflation to a four-month high, while selling prices increased at the fastest pace in four months. Supply chain delays persisted, although delivery times improved slightly. Looking ahead, business confidence weakened sharply, with expectations falling to their lowest level since August 2020 amid economic and geopolitical uncertainty.

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.