The survey’s headline index rose to 60.4 points on a seasonally-adjusted basis from 53.6 in January, above the key 50 mark that signals expansion for the fourth month in a row and at its highest level since March 2007, sponsor Kagiso Securities said recently.

The recovery from recession in Africa’s biggest economy gathered pace in the fourth quarter of 2009, led by a rebound in factory output.

The sector – the second biggest contributor to GDP – grew by 10.1 percent, helping the wider economy expand a faster-than-expected 3.2 percent quarter-on-quarter and annualised.

The surge in PMI suggests the rebound continued in the first quarter of this year, Andre Coetzee, head of fixed income at Kagiso, said in a statement.

“[This suggests] that manufacturing in all likelihood remained a key sector driving the overall growth in the first quarter of 2010.”

With the exception of suppliers’ performance, all other key sub-components were up in February, with new sales orders leaping 13.2 points to 68.6, while the business activity sub-index was up nine points at 65.2.

“The sharp gain in new sales orders hopefully indicates that South African consumer spending moved back into growth territory during the first quarter of 2010,” said Coetzee.

The production sector looks well into recovery but the demand side of the economy remains weak, with households under strain from high debt and the nearly 900,000 jobs lost during last year’s downturn.

The Reserve Bank cut interest rates by five percentage points between December 2008 and August last year to help boost growth and some analysts say soft consumer spending may warrant another cut.

However, signs the economy is recovering may see it hold rates steady again later in March, particularly with consumer price inflation hovering around the top of the three to six percent target range.

The PMI also showed some respite on jobs, with that sub-index edging up to 52.1 in February, signalling a small rise in employment last month.