South Africa: PMI decline signals economic deterioration in March
The S&P Global South Africa Purchasing Managers’ Index (PMI) fell to 48.4 in March from 50.8 in February. As a result, the index moved below the 50.0 no-change threshold and signaled a deterioration in private sector operating conditions compared to the previous month.
March’s downturn was primarily driven by the sharpest drop in new order volumes in over two years: Stronger price pressures, load shedding, drought conditions and high uncertainty dampened customer demand. Lower sales and production constraints led to a notable reduction in private sector output despite continued expansions in staffing and inventories. Firms also reported easing supply-side delays, particularly noting improvements in the Durban port crisis, which contributed to better supply chain management.
March saw higher purchase and staff cost inflation, driven by increased supplier charges, higher fuel prices, and salary hikes. As a result, selling charges rose at the steepest pace since October 2023. Lastly, firms reported their lowest expectations for future output in three months, though business sentiment remained strong overall.