JOHANNESBURG - South African private-sector economic activity expanded for the first time in seven months in February as political uncertainty eased, prompting increased business activity and higher domestic demand.

The Standard Bank Purchasing Managers’ Index (PMI), compiled by Markit, rose to 51.4 in February from 49.0 in January, crossing the 50 mark that separates expansion from contraction for the first time since July 2017, a report showed on Monday.

The February figure was also the highest the index had reached since December 2016. The new orders sub-index ended six months of contraction and output expanded as new projects increased.

Respondents to the survey said the return to growth of output was the result of product diversification and easing political tensions.

Business confidence hit its highest since late 2015 in January on expectations that new President Cyril Ramaphosa would lead economic reform and clamp down on corruption.

Consumer confidence and local assets have also rallied, with the rand reaching three-year highs late last month. In its budget at the end of February, the treasury raised its economic growth estimate for 2018 to 1.5 percent from 1.1 percent previously.

Former president Jacob Zuma's nine-year reign was marked by corruption allegations and economic mismanagement that saw the country's credit downgraded to "junk" by all but one of the three major rating agencies. Zuma has denied any wrong-doing. - Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.