South African Private Sector Rebounds to Growth in March Despite Rising Geopolitical Risks

South Africa's private sector sees a rebound in output and jobs, but the PMI survey warns of record-low confidence as Middle East tensions cloud the economic outlook.

By: AXL Media

Published: Apr 7, 2026, 4:29 AM EDT

Source: Information for this report was sourced from Engineering News

PMI Data Signals Modest Economic Expansion

South Africa’s private sector has successfully returned to growth territory at the close of the first quarter of 2026. The S&P Global South Africa Purchasing Managers' Index (PMI) rose to 50.8 in March, up from the neutral 50.0 mark recorded in February. This marginal improvement indicates a stabilization of business conditions, driven primarily by a resurgence in domestic output and a significant uptick in private sector hiring. The 50.0 threshold serves as the dividing line between economic contraction and expansion.

Output Reaches Six Month Peak

The survey revealed that business output grew at its fastest pace since late 2025. This momentum was largely fueled by the commencement of several new industrial projects and a concerted effort by firms to replenish depleted stock levels. However, the recovery remains "bifurcated," according to S&P Global Market Intelligence economists. While production levels are climbing, total new orders fell for the second consecutive month, suggesting that the current expansion is being driven more by internal capacity building than by robust market demand.

Employment Gains Counter Export Slump

One of the most positive indicators from the March data was the rate of job creation, which reached its highest level since May 2024. Companies reported increased hiring to bolster their capacity for upcoming projects and to manage existing backlogs. This domestic resilience, however, stands in sharp contrast to a deteriorating external environment. Export sales experienced their most significant decline in over two years, a trend directly linked to the disruption of global trade routes and cooling foreign demand.