South Africa’s private sector returned to modest growth in June, according to the latest S&P Global Purchasing Managers’ Index, offering a cautious sign that conditions may be stabilising even as firms remain gloomy about the year ahead. The headline index rose to 50.5 from 49.6 in May, edging above the 50.0 mark that separates expansion from contraction.
Hiring holds up as inflation retreats
The return to growth was driven largely by resilient hiring, with companies continuing to add staff even as output and new orders fell for a second consecutive month — albeit at a slower pace than in May. The clearest bright spot was inflation: after climbing to their highest levels in nearly four years in May, both input costs and the prices firms charged customers eased markedly in June, taking some pressure off margins and households alike.
Confidence still fragile
The relief was tempered by a striking slide in sentiment. Business expectations for output over the coming year fell to their weakest level in almost five years, suggesting companies see the recent softness in demand persisting. That caution matters for the wider economy, where subdued confidence tends to translate into thinner investment and hiring plans further down the line.
The reading lands at a delicate moment for policymakers. The South African Reserve Bank has flagged renewed inflation worries and meets on 23 July to decide on interest rates, while growth for 2026 is still forecast at little more than 1%. A single month above 50 does not make a recovery, but the combination of steadier employment and cooler prices at least points in a more encouraging direction than the past two months suggested.
