JOHANNESBURG (Reuters) -South African businesses experienced a very modest improvement in operating conditions in August as cost pressures eased, the S&P Global South Africa Purchasing Managers’ Index showed on Wednesday.
The headline PMI stood at 50.1 for the month, slightly down from 50.3 in July and marking the fourth consecutive month above the 50.0 threshold that indicates growth – but only just.
The reading suggested a marginal improvement in business conditions, driven by the first rise in output since May.
“Firms reported that the gradual improvement in exchange rates has begun to alleviate cost burdens on imported items,” said David Owen, senior economist at S&P Global Market Intelligence.
“The easing of cost pressures for South African businesses is a positive sign for the private sector economy.”
Input prices rose at their slowest pace in 10 months, with the rand’s appreciation against the U.S. dollar cited as a key factor. However, rising costs for fuel and food remained a concern.
South Africa’s consumer price inflation rose to 3.5% year-on-year in July, driven up by food and fuel prices.
New order volumes increased in August, though the pace of growth softened from July, with domestic demand driving the rise while export orders declined due to higher U.S. tariffs.
Supply chains continued to improve, marking the fifth consecutive month of enhanced vendor performance, the longest streak in the survey’s history. Businesses remained optimistic about future output, though concerns about U.S. tariffs and the political climate persisted.
U.S. President Donald Trump has imposed a 30% tariff on imported goods from South Africa, the highest rate in Sub-Saharan Africa, potentially leading to tens of thousands of job losses in sectors like agriculture and carmaking.
(Reporting by Johannesburg bureau; Editing by Hugh Lawson)
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