South African business confidence hits lowest level since 2020

South African business confidence has fallen to its lowest level since August 2020, according to a private-sector survey released on Thursday.

The S&P Global South Africa Purchasing Managers’ Index (PMI) remained at 49.0 in October, unchanged from September.

A reading below 50 indicates deteriorating private-sector business conditions, rather than a contraction across the entire South African economy.

Why is South African business confidence falling?

According to Reuters’ report on the survey, David Owen, principal economist at S&P Global Market Intelligence, identified the sharp decline in business confidence as a particularly concerning finding.

Businesses’ expectations for activity over the next 12 months fell to their lowest level in more than six years, with confidence weakening across every sector surveyed.

That does not mean companies expect business activity to decline throughout 2027. Firms still anticipate growth on average, but their expectations are considerably weaker than before.

Fuel prices and port delays push up costs

Higher fuel prices placed further pressure on businesses, pushing purchase-price inflation to its highest rate since June.

Companies also passed some of these costs on to customers, with the rate of increase in selling prices reaching a four-month high.

Supply-chain disruptions added to the pressure. Businesses reported continued delivery delays, including hold-ups at the Port of Durban.

Output declined for a second consecutive month, recording its sharpest fall since December 2025.

The October survey predates the government’s temporary fuel-levy reductions introduced on 4 November. Whether that relief will improve business sentiment remains uncertain.

Orders fall at home and abroad

New orders declined again in October, although the fall was less pronounced than in September. Export demand also weakened for the first time since May.

For workers and consumers, the findings raise concerns about employment opportunities and household costs.

Businesses facing weaker demand may become more cautious about hiring, while rising operating costs can place additional pressure on prices. However, the survey does not establish how many jobs could be affected or predict future retail price increases.

Do you think South African business confidence will recover in 2027?