RFA Breakfast Paper - October 5, 2026

South Africa’s Private Sector Returns to Contraction as Demand Weakens

The S&P Global South Africa PMI fell to 49.0 in September 2026 from 50.5 in August, signaling a renewed contraction in private-sector activity and the weakest performance so far this year. The downturn was driven by a sharp decline in new orders, which contracted at the fastest pace in two-and-a-half years amid uncertainty over economic conditions and higher fuel prices. Weaker demand also led firms to reduce purchasing and inventories, while employment remained broadly stable. Higher fuel costs pushed input prices sharply higher, although slower wage growth helped moderate overall cost inflation, while output prices increased at their fastest pace since June as firms passed higher costs on to customers. Supply-chain pressures also intensified, with supplier delivery times lengthening at the fastest rate since February 2024 amid delays at the Port of Durban and disruptions linked to the Middle East. Despite the near-term weakness, business expectations improved to a four-month high, supported by greater optimism around future demand and expansion plans.

U.S. Equity Markets Rise as Softer Jobs Data Eases Rate Concerns

U.S. equity markets ended Friday higher as investors responded positively to softer-than-expected labour market data. The Nasdaq closed near a record high, while falling oil prices provided additional support, with crude declining about 1.5% following plans by G7 nations to release emergency oil and diesel reserves. Despite the stronger equity session, bond market pressure persisted as the 10-year Treasury yield reversed its initial decline to end near its highest level since 2002. The September jobs report showed the U.S. economy added 29,000 jobs versus 89,000 expected, while unemployment edged up to 4.2% and wage growth slowed to 3.0%. The data pointed to a cooling but still stable labour market, reducing concerns around inflationary pressure and easing expectations for further Fed tightening. This supported risk sentiment into the weekend, although elevated Treasury yields remain a key consideration for equities.

NGX Closes Week Lower as Profit-Taking Persists

The Nigerian equity market closed the week in bearish territory, with the NGX-ASI and Market Capitalization both declining 0.16%. Sustained profit-taking in mid-cap and blue-chip stocks weighed on sentiment as trading began for the new month. The NGX-ASI fell 403.40 basis points to close at 250,808.27, while Market Capitalization declined by ₦261.92 billion to ₦162.84 trillion. On a weekly basis, the NGX-ASI fell 0.52%, while investors’ wealth declined by approximately ₦812.60 billion. Trading activity also weakened, with total volume and value traded falling 46.03% and 48.34%, respectively. Approximately 557.15 million units worth ₦27.57 billion were exchanged across 53,450 deals. Sector performance remained broadly negative, with four of five major sectors declining. Banking led the losses at 0.97%, followed by Consumer Goods, Oil & Gas and Industrial Goods, while Insurance was the sole gainer, advancing 1.21%.