The S&P Global South Africa Private Sector Purchasing Managers' Index (PMI) rose to 50.5 in June from 49.6 in May and 51.6 in April.
S&P Global Said that the degree of improvement was modest. The headline figures have been improved by a sustained decline in business activity and new orders.
Accordingly, S&P Global noted that respondents found that the demand environment for domestic businesses remained challenging at the end of the second quarter.
Although total sales volumes declined for the second consecutive month, the pace was at a slower pace than in May. Survey respondents attributed lower customer spending to economic uncertainty and elevated pricing pressures.
South African Policy Uncertainty Index (PUI) The worst level on record was reached in the second quarter of 2026.
The Northwestern University Business School PUI worsened from 77.8 in the first quarter and 64.9 in the fourth quarter to 81.9 in the second quarter.
good news
S&P Global said the services sector provided a notable bright spot, standing as the only category to record an increase in new jobs in June.
The good news was that staffing levels increased for the fifth consecutive month. Companies continued to hire both permanent and temporary employees to expand capacity.
Staffing gains enabled companies to keep their backlog in check. Still, supply chain pressures persisted in June. Delivery times increased at a solid pace, slightly faster than in May.
The current supply chain disruption has primarily resulted from slow shipments of imported goods due to the Middle East conflict. Additionally, there were vendor capacity constraints associated with high fuel costs.
Some companies ordered additional inputs to protect against anticipated price increases and supply disruptions. This increased input inventories for the third time in four months.
The South African Reserve Bank reported that the index to gross domestic product (GDP) ratio fell to a record low of 4.8% in the first quarter of 2026. The annual average was from 5.8% in 2024 to only 5.5% in 2025, well below the ratio of 6.1% in 2023 and 14.1% in 2008.
effect of inflation
According to respondents, the inflation picture showed significant improvement in June. The input price index fell nearly seven points, bringing the rate of cost inflation in line with the historical average.
Nonetheless, businesses are facing higher fuel and shipping charges due to oil market volatility.
Wage inflation also declined, but remained well above normal levels due to staffing requirements and rising cost of living.
Output price inflation slowed from a 46-month peak in May but remained high overall. Companies were often reporting being burdened by increased fuel prices.
The industrial sector experienced the strongest inflation rate among the four main categories.
“The PMI recovery in June was mainly helped by resilient hiring at South African companies, although output and order books fell at a slower pace than in May,” wrote David Owen, principal economist at S&P Global Market Intelligence.
He said, “The silver lining from the June data is a significant easing of inflation pressures. After reaching the highest levels in nearly four years in May, input price and output fee inflation rates have retreated. While survey observations indicate that recent cost increases have been largely dependent on oil markets, the notable cooling of global oil prices during June provides some confidence that inflation will ease further.”