The seasonally-adjusted PMI for the factory sector was at 52.4 points in July compared to 45.7 in June. A reading above the 50-point mark shows growth.
"In these months (May and June), significant policy uncertainty remained and hurt demand," local bank Absa, which sponsors the survey, said in a statement, referring to South Africa's national election in May and its aftermath.
The business activity sub-index and new sales orders also rose in July.
"The improvements suggest that on-hold orders are now being realised and translated into better activity," Absa said.
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