One of South Africa’s biggest employers under siege
Sentiment among South African manufacturers plunged to the weakest level since lockdowns were implemented during the Covid-19 pandemic, as export sales remain weak and the manufacturing industry struggles to gain traction.
The manufacturing sector in South Africa is one of the country’s biggest employers, currently employing over 1.6 million workers as of Q3 2025.
It has come under significant pressure in 2025, with the latest data from Stats SA pointing to a 3.7% decline in jobs over the past quarter, and a 1.5% decline over the past year.
Absa Group’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 42 in November from 49.2 in the prior month, the Johannesburg-based lender said in an emailed statement on Monday.
That places the PMI below the 50 level — which indicates an expansion — for a second consecutive month and at the lowest since April 2020, the data shows.
The biggest contributor to the slump was a steep decline in the index reading for new sales orders to 35.6 from 48.9 in October.
“Export sales remained weak – as they have been since the end of 2024 – suggesting that a renewed drop in demand was largely driven by the domestic economy,” Absa said.
“Indeed, some comments refer to a slowdown after a short-lived revival.”
While the data suggests that the drop was driven locally, South Africa has also faced significant external pressures this year, particularly the ongoing tariff war being waged by the United States.
Despite being a relatively small part of South Africa’s export market, manufacturing businesses—particularly in the auto sector—have been taking strain.
This points to the sector under pressure on multiple fronts.
The business activity index declined to 36.7 from 49.4, reflecting persistent weakness and a “lack of traction” in South Africa’s official manufacturing data.
South Africa will publish third-quarter gross domestic data on Tuesday that’s expected to show the economy grew 0.5%, according to the median estimate of 11 economists in a Bloomberg survey.
Manufacturing data for the three months through September show the sector only managed 0.1% growth.
Despite the declines, the BER noted that there is some positive news.
Firstly, the purchasing price index declined by a notable 7.4 index points in November. A stronger rand exchange rate and lower oil price during the month likely drove this decline, with a sticky diesel
price likely preventing a bigger drop.
“If sustained, lower cost pressures on manufacturers should, over time, contribute to lower consumer inflation in the economy,” the group said.
Furthermore, the expected business conditions index nudged higher. Following two months below the 50-point mark, it edged up to 50.8.
This suggests that an improvement in business conditions in six months’ time is expected. However, it is worth noting that this is well below the long-term average of the index, the BER noted.
With Bloomberg
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