🇿🇦 South Africa's Economic Pulse: Week of 2-6 June 2025

By Loy de Jager | Principal, Upside Properties

📉 Key Economic Developments

Business Activity Hits Four-Year High

South Africa's S&P Global PMI rose to 50.8 in May-the first sign of expansion in five months and the strongest reading since May 2021. Domestic demand and new project starts have lifted activity, despite persisting export and logistics constraints.

Mr Price Delivers 10.1% Profit Growth

On 6 June, Mr Price reported a 10.1% year-on-year EPS increase to R13.79. Retail turnover climbed 7.8% to R39.4 billion, and the group declared a strong final dividend of 593.5 cents. The results point to a healthy, adaptive retail environment.

Manufacturing Sector Remains in Decline

The Absa PMI fell to 43.1 in May-marking the seventh consecutive month of contraction in manufacturing. Sector performance continues to be hampered by Transnet-related bottlenecks and weakened export channels.

🌍 Global Factors

ECB Cuts Rates Again

On 5 June, the European Central Bank cut its benchmark interest rate to 2.0%-the eighth cut since mid-2024. The move signals a shift toward looser monetary policy amidst cooling inflation and uncertain trade dynamics.

Trump-Musk Feud Rattles Global Markets

A highly publicised clash between Donald Trump and Elon Musk shook markets this week. Musk criticised Trump's proposed "One Big Beautiful Bill," prompting Trump to retaliate by threatening to remove EV subsidies and cancel Tesla's federal contracts.
Tesla's share price plunged 14%, wiping out approximately $152 billion in market cap.

Why it matters: Such volatility in U.S. policy can disrupt global EV supply chains, indirectly influencing investor sentiment in South Africa's clean-energy infrastructure and real estate sectors.

💼 Property Market Insight

• Retail landlords gain confidence from resilient consumer performance, with major tenants like Mr Price delivering strong financials.

• Industrial/logistics assets near clean-tech hubs may become more attractive as international EV uncertainty persists.

• Persistent manufacturing woes reinforce the importance of infrastructure investment-especially rail and port reform.