KEY POINTS
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South Africa business activity shows modest improvement in August.
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Input prices rose at their slowest pace in 10 months.
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U.S. tariffs weigh on exports and job outlook.
South African businesses saw a marginal improvement in operating conditions during August as easing cost pressures offered some relief, according to the latest S&P Global South Africa Purchasing Managers’ Index. The PMI, released Wednesday, came in at 50.1, slightly below July’s 50.3 but still above the 50.0 threshold for the fourth straight month, signaling growth—albeit minimal.
The report showed that business activity gained some momentum, supported by the first rise in output since May. “Firms reported that the gradual improvement in exchange rates has begun to alleviate cost burdens on imported items,” said David Owen, senior economist at S&P Global Market Intelligence. He added that the easing of cost pressures for South African businesses was a positive sign for the private sector economy.
South Africa business activity shows modest improvement
Input costs increased at their slowest pace in 10 months, helped by the rand’s appreciation against the U.S. dollar. Even so, higher fuel and food prices remained a concern for businesses and households. Consumer price inflation accelerated to 3.5% year-on-year in July, largely driven by the continued climb in food and fuel costs.
New orders rose in August, though at a slower pace compared with July, with domestic demand leading the gains. Export orders, by contrast, weakened under pressure from higher U.S. tariffs. Despite that drag, supply chains recorded their fifth consecutive month of improved vendor performance, the longest stretch in the survey’s history.
South Africa business activity faces external challenges
While business sentiment remains generally upbeat about future output, firms are increasingly cautious over global trade tensions and domestic politics. U.S. President Donald Trump’s decision to impose a 30% tariff on imports from South Africa—the highest rate in Sub-Saharan Africa—has added pressure on exporters. Analysts warn the move could cost tens of thousands of jobs in agriculture, mining, and carmaking.
Despite those risks, optimism within the private sector persisted, underpinned by hopes that easing cost burdens and steadier exchange rates may provide a foundation for more stable growth in the coming months.
