South African private sector activity expanded in February for the first time in six months as staffing and purchasing levels increased amid stronger confidence, a survey showed on Tuesday.
The S&P Global South Africa Purchasing Managers' Index (PMI) rose to 50.8 in February from 49.2 in January. A reading above 50 shows expansion, which South Africa had not seen since last August.
The improvement in operating conditions came as new business volumes stabilised, following notable falls in recent months, said S&P. Output continued to fall but at a slower pace.
"Survey evidence suggests that the cooling inflation environment has been a major factor in helping to revive markets," said David Owen, senior economist at S&P Global Market Intelligence.
"However, with the stabilisation in new orders following the worst downturn for a year in January, businesses should not be complacent about the ongoing economic challenges," he added.
South Africa has been suffering from power shortages and a crisis at its State-owned logistics company Transnet, which is struggling to provide adequate freight rail and port services. Durban port still faces a backlog of containers, said S&P.