A business survey on Wednesday, June 3, 2026 showed that South Africa's private sector shrank in May due to a decline in output and new orders amid higher fuel prices and uncertainty over the Iran war.
The S&P Global South Africa Purchasing Managers' Index (PMI) fell to 49.6 in May from 51.6 in April. The number 50 separates growth from contraction.
“The war in the Middle East and particularly rising fuel prices took their toll on the South African private sector in May. A further strengthening of inflation pressures prompted a fresh decline in output and new orders,” said Andrew Harker, economics director at S&P Global Market Intelligence.
Production declined for the first time in five months, with companies citing higher fuel prices, the Iran war as well as stormy weather in South Africa. New orders fell for the third time in four months and at the fastest pace so far this year.
Survey respondents said price increases linked to the Middle East conflict have hurt international demand, with economies in Europe and Africa reporting fewer new orders.
Despite the weak business environment, companies were more optimistic about the outlook for the year ahead.
S&P Global said confidence in 2026 was at an all-time high, supported by pipelines of new work, advertising plans and hopes for more stable conditions.
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