South Africa's private sector remains stable amid declining sales

LootboxPhobia · 2026-03-04T15:27:50+00:00

South Africa's private sector PMI for February from S&P Global was 50.0, indicating business conditions are unchanged. New business declined slightly, and companies remain cautious about future activity. Despite mild price pressures and inventory reductions, employment levels have rebounded. Overall outlook remains weak, with the forecast for output over the next 12 months being the weakest in four and a half years.

LootboxPhobia

2026-03-04 15:27:50

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Investing.com – According to data released on Wednesday, South Africa’s private sector business conditions remained unchanged in February, with the S&P Global Purchasing Managers’ Index (PMI) staying at 50.0 for the second consecutive month.

The PMI reading of 50.0 indicates that business conditions are stable compared to January. Readings above 50.0 suggest improvement, while those below 50.0 indicate deterioration. February’s results show some improvement from the fourth quarter of 2024, when conditions were deteriorating throughout the period.

Private sector activity in South Africa remained largely unchanged in February, as companies maintained stability amid a mild demand environment. New business levels slightly declined for the fourth time in the past five months.

Business operations focused on clearing backlogs, leading to a significant reduction in unfinished work. The decrease in order backlogs signals a weak outlook, with private sector firms remaining cautious about future activity.

The forecast for output over the next 12 months is the weakest in four and a half years, reaching the lowest level since July 2021. Survey participants remain broadly optimistic about sales, hoping that lower inflation, falling interest rates, and a strong local currency will support growth.

Price pressures faced by South African companies remain relatively moderate, with respondents linking this to an improved USD exchange rate and falling fuel prices. Wage costs increased more significantly, with inflation rising to a seven-month high.

Moderate cost pressures have enabled companies to offer discounts to customers. For the first time since May 2025, average selling prices have declined.

Employment levels increased again in February, after a slight decline in the previous survey period. Inventory strategies remained cautious, with companies reducing inventories for the third consecutive month.

Supply disruptions for inputs occurred again in February, but these delays were less severe than earlier in the year.

The S&P Global South Africa PMI is compiled based on survey responses from approximately 400 private sector purchasing managers. Data collection took place from February 10 to February 25.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

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