South Africa’s private sector business activity has experienced its most robust expansion in four years, according to the most recent S&P Global Purchasing Managers’ Index (PMI) released today.

In May, there was a slight increase in activity, as the PMI rose from 50.0 in April to 50.8, marking the first increase since November 2024.

The increase was influenced by a significant increase in domestic demand, new project launches in other industries, and an increase in production.

Despite the improvement in new business orders, the foreign demand remained low, particularly due to the persistent trade tensions and tariffs imposed by the United States.

The fifth consecutive month of declining export orders has intensified concerns regarding the long-term competitiveness of the trade.

However, there were signs of improvement in domestic supply networks, as inventory levels were replenished and delivery times were enhanced.

Businesses responded to the slowdown in input price inflation by reducing their selling prices, providing consumers with a transient respite from the increasing costs.

Nevertheless, there is some uncertainty regarding the labor market’s capacity to recuperate, as the number of employed individuals decreased only slightly as a consequence of restructuring and labor shortages.

Despite these obstacles, corporate optimism has reached a three-month high, as companies anticipate increased client demand and the introduction of new products, which are expected to increase future output.

This is interpreted by experts as a signal of cautious optimism in recognition of the general economic uncertainty in South Africa