S&P Global's South Africa purchasing managers' index (PMI) contracted to 50.2 in December from 50.6 in November, remaining just above the 50-point mark that separates expansion from contraction.

The positive reading reflected a slight upturn in employment, while output, new orders and inventories declined.

"The latest findings suggest that GDP figures are likely to disappoint in the fourth quarter following a more robust expansion in Q3," David Owen, economist at S&P Global Market Intelligence, said.

However, South African firms remain hopeful of an improvement in business activity in the coming year as reduced inflationary pressures should help to ease the burden on customers, S&P said.