SA’s private-sector economy showed signs of stabilisation in April with business conditions halting a four-month decline, according to the latest S&P Global SA purchasing managers’ index (PMI).
The PMI, released on Tuesday, rose to 50.0 in April from 48.3 in March marking the first time since November 2024 that the index has not been in contractionary territory. A reading of 50 indicates no change in operating conditions with values above that suggesting improvement.
“The PMI print of 50.0 in April was better news for SA businesses as the second quarter began,” said David Owen, senior economist at S&P Global Market Intelligence.
The modest rebound was underpinned by marginal increases in output, new orders and employment as businesses benefited from improving supply chains and a slight uptick in demand. This comes after the first quarter of 2025 saw a sustained downturn in private sector activity, raising concerns over the trajectory of GDP growth.
“A sustained decline in operating conditions across the first quarter suggests that GDP growth has softened, but early signs for the second quarter were more promising,” Owen said.
Sales growth, though only fractional, was supported by larger client orders, new contracts and the payoff of marketing efforts. While the services sector led the recovery in activity modest gains were also seen in retail, wholesale and construction. Manufacturing, however, continued to lag with a decline in industrial production.
April marked the first improvement in supplier delivery times since June 2023. Business reported fewer delays at Durban’s port and switching to new vendors helped to improve lead times. This helped business to restock key inputs with purchasing activity increasing for the first time in four months.
This “should support businesses in their efforts to increase output,” Owen said.
Employment also edged higher, ending a three-month streak of job losses. Although the rise in staffing was mild, some companies noted hiring to build capacity,
However, currency volatility took its toll. Input prices rose sharply, driven by a weakening rand against the dollar. This marked the fastest increase in purchasing costs since August 2024, and while wage pressures eased, businesses pointed to higher import fees and taxes as additional cost burdens.
In response to higher input costs, firms raised their selling prices again after a brief decline in March. However, the rate of output charge inflation was described as “modest” and mainly concentrated in the industrial and retail segments.
Despite the improved activity levels, optimism among businesses dipped. April recorded the second-lowest level of future output expectations in 19 months. Companies cited political uncertainty, both domestically and internationally as a drag on sentiment.
“Volatility in the rand, especially during the first half of April, made its mark on prices, with purchase prices rising at the fastest rate since last August,” Owen said.
“The currency market may face further choppiness as firms await clarity on the national budget and global trade conditions amid US tariff announcements. These uncertainties partly weighed on output expectations, although in general firms remain confident about the year ahead.”
Still, about 40% of businesses remained positive about the year ahead, expressing hopes for stronger demand, improved investment and easing inflation pressures.
Update: May 6 2025
This story has been updated with comments by an economist.
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