Manufacturing sector sees unexpected resurgence in July after eight months of decline

MANUFACTURING activity in South Africa in July returned to positive territory for the first time in nine months, in a significant turnaround for the struggling economy.

- YOGASHEN PILLAY

The Absa Purchasing Managers' Index (PMI) released on Friday indicated that the index edged above the 50-point mark and recorded an expansion, following eight consecutive months in contractionary territory.

The last time the headline PMI was in the above-50 expansionary territory was in October 2023 at 52.6 points.

According to Absa, new sales orders rose by 9.7 points to 55.9 in July, recording a third consecutive month of improvement and signalling a much stronger recovery in demand at the start of the third quarter.

"Export sales also showed a significant increase, but at a low level, signalling that manufacturers remain cautious amid regulations and ongoing trade negotiations," Absa said.