South Africa’s private sector nudged back into expansionary territory in March, as a recovery in domestic output and a hiring uptick managed to offset a sharp decline in export orders and souring business sentiment.
The S&P Global South Africa Purchasing Managers’ Index (PMI) rose to 50.8 in March, up from the neutral mark of 50.0 recorded in February. A reading above 50.0 signals growth in the sector, marking a cautious but significant turnaround for the continent’s most industrialized economy.
The return to growth was primarily driven by a stabilization in business activity and a renewed appetite for recruitment. Companies reported increased hiring to manage backlogs, suggesting a level of domestic resilience.
However, this internal momentum faced stiff resistance from international factors. New export orders suffered a notable slump, largely attributed to logistical disruptions and dampened global demand linked to the escalating conflict in the Middle East.
Despite the headline growth, business confidence fell to its lowest level in several months. The combination of high energy costs and a volatile Rand has intensified “input cost inflation,” forcing many firms to adopt a “wait-and-see” approach regarding long-term capital investments.
The report noted that while firms are currently expanding their workforces to meet immediate needs, the sustainability of this growth remains tethered to global oil price stability and the resolution of shipping bottlenecks.
