Business activity in South Africa contracted at its fastest pace in nearly a year in December, according to survey data released on Tuesday, highlighting continued economic challenges at the end of 2025. The purchasing managers’ index fell well below the neutral mark, signalling a decline in output and new orders.

Companies reported weaker demand from both domestic and export markets, prompting cautious business sentiment. Reduced consumer spending and delayed investment decisions weighed heavily on overall activity. Despite the slowdown, employment levels edged slightly higher.

The survey also showed easing input-cost pressures, partly due to currency strength that helped reduce import prices. This provided some relief for businesses facing higher operating costs earlier in the year.

Economists said the data underscores the fragile state of the economy, with growth constrained by structural challenges and subdued demand. However, some firms expressed hope for improvement in the coming months.

Policymakers and investors are expected to closely watch upcoming data releases for signs of recovery, as further weakness could influence fiscal and monetary policy decisions.

Source: Reuters.