SA manufacturing slumps to contractionary territory, signalling deepening sector strain

SOUTH Africa's manufacturing sector took a sharp downturn in November, with the seasonally adjusted Absa Purchasing Managers' Index (PMI) plunging by 7.2 points to 42, its weakest reading in several months and well below the 50-point mark that separates expansion from contraction.

- SIPHELELE DLUDLA

The steep decline was driven by worsening conditions across four of the index's five major components, with only employment showing a marginal improvement, though it too remained in negative territory.

Absa analysts noted that the PMI reflects actual changes in activity and demand rather than sentiment, making the latest figures a direct signal of renewed strain in the sector.

Overall, Absa said the November PMI underscores the fragile state of South Africa's manufacturing sector, where domestic demand remains weak, export markets are subdued, and output continues to lag, even as cost pressures begin to ease and some logistical bottlenecks show early signs of improvement.

"The November PMI results highlight the ongoing fragility in South Africa's manufacturing sector," Absa said.

"A steep deterioration in demand and production overshadowed slight gains in employment and business expectations. Lower cost pressures are a positive, but alone are not sufficient to lift momentum in the absence of demand recovery."