Factory activity ends 2025 in deep contraction as PMI plunges further

S&P Global reports that December saw the strongest downturn in operating conditions

- YOGASHEN PILLAY

SOUTH Africa's manufacturing sector closed out 2025 on an exceptionally weak footing, with business activity contracting sharply as demand dried up and firms cut back on inventories and employment, according to the latest Purchasing Managers' Index (PMI) data released on Thursday.

The Absa PMI fell by a further 1.5 points to 40.5 in December 2025, moving even deeper into contractionary territory and marking its lowest reading since 2020. The index remains well below the 50-point threshold that separates expansion from contraction, underscoring the severity of the downturn in manufacturing activity as the year came to an end.

The bleak Absa PMI reading followed the release of the S&P Global South Africa PMI earlier in the week, which also signalled a pronounced deterioration in business conditions.

S&P Global reported that December saw the strongest downturn in operating conditions in nearly a year, as customers reined in spending and manufacturers responded by scaling back activity.