South African Business Activity Stabilises in January After Weak End to 2025

The most recent data indicates that South Africa’s private sector business operations reached a stable point during January 2026 because this period ended a stretch of declining activity that began in the previous year. The Purchasing Managers’ Index (PMI) showed that the headline index increased to 50.0 during January after it dropped to 47.7 in December which demonstrated that business conditions had stopped their downward trend and began to reach a stable state.

The year began with investment and demand pressures showing decreasing levels because the company achieved better performance through stable production and higher order intake. The services sector kept its weak performance while export volumes decreased, but the company managed to achieve two positive outcomes, which included new business growth and its highest input purchasing rate during the past four months.

The stronger South African rand, which has risen more than 3 percent against the US dollar since the start of this year, brought another benefit to improve market sentiment. The stronger currency reduction of wage expenses resulted in lower output price growth rates which provided South African producers with slight financial relief.

Business confidence reached a three-month low because the primary business activities maintained their current state. The demand forecasts for the upcoming months, which demonstrated some improvement, still make companies approach their future business opportunities with caution. The private sector faces two main challenges that create a defensive atmosphere because of export difficulties and inflationary pressures.

The PMI data reflects trends across the broader economy, which shows both improvements and ongoing issues. The South African business environment needs to overcome multiple obstacles which will prevent it from achieving its goals until 2026 ends, despite the current situation.