South Africa’s Business Downturn Eases in February, PMI Shows Signs of Recovery

Business activity in South Africa continued to weaken in February 2025, but the pace of contraction slowed compared to the start of the year, according to the latest S&P Global South Africa Purchasing Managers’ Index (PMI). The PMI rose to 49.0 in February from 47.4 in January, remaining below the 50.0 threshold that separates growth from contraction for the third consecutive month.

A Partial Recovery in Economic Momentum

“February data signalled a partial recovery in economic momentum in South Africa,” said David Owen, senior economist at S&P Global Market Intelligence. “This recovery appeared to be largely due to a softer contraction in business activity, as some firms experienced improved demand conditions and the resumption of projects.”

The rate of decline in output, new orders, employment, and inventories all slowed down, indicating a tentative stabilization in the business environment. However, new orders fell for the third consecutive month, with the wholesale and retail sectors experiencing the sharpest declines.

Export Sales and Political Unrest

Export sales also dropped, albeit at the slowest rate in six months. This partial recovery in exports can be attributed to reduced political unrest in neighboring Mozambique, which has historically impacted trade routes and business confidence in the region.

Cautious Optimism Amid Trade Concerns

Despite the ongoing challenges, firms remained cautiously optimistic about future output. However, concerns about U.S. trade policy and its potential impact on South African businesses lingered. The PMI survey indicated that while the private sector’s health weakened, it did so to a much lesser extent than in January, suggesting that firms generally expect conditions to recover soon.

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The latest PMI data for February 2025 offers a glimmer of hope for South Africa’s business sector, showing signs of a partial recovery despite ongoing challenges. While the economy remains in contraction territory, the slower pace of decline suggests that firms are beginning to adapt and anticipate a rebound. As South Africa navigates these uncertain times, strategic investments and proactive measures will be crucial for sustained economic recovery and growth.

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