Business Activity in South Africa Shows Signs of Recovery Despite Ongoing Weakness

Business activity in South Africa remained under pressure in February, but the pace of decline eased 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, staying below the 50.0 threshold that marks expansion from contraction for the third straight month. Despite this, the rate of decline in output, new orders, employment, and inventories slowed.

David Owen, senior economist at S&P Global Market Intelligence, noted that while economic conditions remained challenging, some businesses saw improved demand and resumed projects, contributing to a partial recovery.

New orders continued to fall, particularly in the wholesale and retail sectors, though at a slower pace. Export sales also declined but at the slowest rate in six months, helped by reduced political unrest in Mozambique.

Firms remained cautiously optimistic about future output, though concerns lingered over potential disruptions from U.S. trade policy. The survey suggested that while the private sector is still under strain, businesses expect conditions to improve in the near future.

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