South Africa’s private sector expanded at its fastest pace in nearly four years last April, as sales and production rose amid supply concerns linked to the war in Iran, according to a business survey released on Wednesday, May 6, and cited by Reuters.
The S&P Global Purchasing Managers’ Index (PMI) for South Africa rose to 51.6 in April, up from 50.8 in March. The 50-point mark separates growth from contraction.
“Some comments from survey participants suggest that the increase was driven by the building of safety stock, as companies anticipated greater difficulties arising from the conflict in the Middle East, indicating that this growth momentum may be temporary,” said David Owen, senior economist at S&P Global Market Intelligence.
Production growth accelerated to an 11-month high, extending the current expansion to four consecutive months. New orders rose for the first time in three months, with the strongest growth in just over a year and a half.
Exports also grew at the fastest pace since July 2023, driven by new customer wins and stronger demand in markets such as Zambia and the Democratic Republic of the Congo, according to S&P Global.
However, cost pressures intensified sharply, mainly due to the depreciation of the rand and rising international oil prices. South Africa is a net importer of petroleum products and is highly exposed to fluctuations in global energy prices.
Supplier delivery times lengthened as transport schedules were disrupted by the war.
Business sentiment improved for the first time in five months, supported by strong order books, new product launches, and export opportunities.
Nevertheless, companies remained cautious due to mounting inflationary pressures and broader geopolitical tensions, the survey concluded.
