Business conditions in South Africa’s private sector stabilized in January after a challenging end to 2025, with demand stabilizing and price pressures easing, an S&P Global survey showed on Wednesday, January 4.
According to a Reuters publication, the Purchasing Managers’ Index (PMI) rose to a neutral 50.0 in January, up from 47.7 in December. PMI values above 50.0 indicate growth, while values below that indicate contraction.
Production and new orders stabilized after a sharp decline in December, with companies reporting a slight increase in new business volume. However, the service sector remained sluggish and total exports continued to fall.
Input purchases grew at the fastest rate in four months, although supply chain disruptions resulted in longer delivery times for the first time in ten months.
Inflationary pressures eased, with overall input prices rising at the slowest pace in three months. A stronger rand also helped to offset higher wage costs, resulting in only a modest increase in selling prices.
South Africa’s local currency has appreciated more than 3% against the dollar so far this year.
“Lower inflation, increased tourism, and improved energy supply appear to have supported companies in their forecasts for 2026,” said David Owen, senior economist at S&P Global Market Intelligence.
Optimism about future demand persisted, driven by expectations of better economic conditions and increased tourism, although confidence fell to its lowest level in three months.
