JOHANNESBURG, Feb 4 – Business conditions in South Africa’s private sector showed signs of stabilising in January following a difficult close to 2025, supported by firmer demand and softer price pressures, according to the latest survey from S&P Global.
The Purchasing Managers’ Index rose to 50.0 in January from 47.7 in December, marking a return to neutral territory. Readings above 50 signal expansion, while those below indicate contraction.
Both output and new orders stopped declining after a sharp fall in December, with firms reporting a mild pickup in new business. Activity in the services sector, however, remained weak, and export demand continued to soften.
Purchasing activity increased at its strongest pace in four months as firms restocked and prepared for improved conditions. At the same time, supply chain frictions resurfaced, leading to longer delivery times for the first time in ten months.
Cost pressures continued to ease, with input price inflation slowing to a three-month low. Gains in the rand helped cushion businesses from rising wage bills, keeping selling price increases modest. The local currency has strengthened by more than 3% against the US dollar since the start of the year.
According to David Owen, senior economist at S&P Global Market Intelligence, lower inflation, stronger tourism flows and more reliable energy supply have supported companies’ expectations for improved conditions in 2026.
While firms remain broadly optimistic about future demand, buoyed by hopes of a stronger economy and increased tourism, overall confidence dipped to its lowest level in three months, underscoring continued caution among businesses.
