S. Africa’s private sector expands in Feb

South Africa witnessed a resurgence in private sector activity in February after a six-month downturn, buoyed by increased staffing and purchasing levels alongside a surge in confidence, according to Reuters citing a survey released on Tuesday.

The S&P Global South Africa Purchasing Managers’ Index (PMI) rose to 50.8 in February, marking a rebound from 49.2 in January and signaling expansion for the first time since last August.

The improvement in operational conditions came while new business volumes stabilised following significant declines in previous months, as reported by S&P. Output continued to decline, but at a lesser rate.

David Owen, senior economist at S&P Global Market Intelligence, remarked that survey findings indicate the cooling inflation environment has played a pivotal role in revitalising the market. Nevertheless, Owen cautioned that despite the stabilisation in new orders following January’s sharp downturn, businesses should not overlook ongoing economic challenges.

South Africa continues to grapple with power shortages and logistical hurdles at its state-owned enterprise, Transnet, which is struggling to maintain adequate freight rail and port services. S&P highlighted that the Durban port is still dealing with a backlog of containers.