The manufacturing sector started 2025 on a weaker note as total production contracted by 3.3% year on year in January, according to Stats SA.
The decline compounds the 1.2% drop recorded in December 2024, highlighting deepening pressures on the sector.
Three major industries were the main contributors: petroleum, chemical products, rubber and plastics reported a 9.1% decline in output, shaving 2.1 percentage points off total manufacturing output; food and beverages declined 3.2%, reducing overall output by 0.8 of a percentage point; and motor vehicles, parts, accessories and other transport equipment plummeted 10.1%, also detracting 0.8 of a percentage point.
“The January industry data portrays a depressing picture and indicates that the [manufacturing sector] have started 2025 on the back foot following a disappointing end to 2024,” said Jee-A van der Linde, chief economist at Oxford Economics.
The declines signal broad-based weakness in key segments of the economy, with petroleum and automotive manufacturing taking an outsize hit.
Despite the overall downturn, wood and wood products, paper, publishing and printing offered some resilience, expanding 5.6% and contributing 0.6 of a percentage point to total output.
“Inefficiencies and deficient infrastructure particularly on the logistics front continue to weigh on export potential,” said Investec economist Lara Hodes.
“However, restoring and expanding infrastructure is a key priority of government and was emphasised strongly in the recent budget.”
Globally, manufacturing conditions improved somewhat in January, “however activity remained largely subdued in the Eurozone, a key trading partner”.
“Specifically, the HCOB Eurozone Manufacturing index remained in contractionary territory at the start of 2025,” Hodes said.
GLIMMER OF LIGHT
One positive shift was a 0.2% month-on-month increase in production from December to January following a sharp 2.2% drop in December and a further 1.2% contraction in November.
However, this minor rebound is unlikely to indicate a sustained recovery given the deeper annual and quarterly contractions.
Over the three months ending January seasonally adjusted manufacturing production contracted by 1.8% compared with the previous period.
Eight of the 10 manufacturing divisions reported declines during this period.
The hardest-hit sectors were petroleum, chemical products, rubber and plastics, which saw a 3.6% decrease, reducing total output by 0.8 percentage points; basic iron and steel, non-ferrous metals, and machinery, which contracted by 3.4%, cutting output by 0.7 percentage points; and motor vehicles, parts and transport equipment, which declined by 4.6%, lowering output by 0.4 percentage points.
The persistent declines across multiple industries underscore continued pressure on industrial activity, driven by subdued domestic demand, global trade headwinds, and ongoing logistical challenges.
Manufacturing sales also reflected the sector’s fragility, decreasing by 0.8% month on month in January after a 1.1% gain in December and a 3.0% decline in November.
Sales fell 0.9% in the three months ending January, largely driven by basic iron and steel, non-ferrous metals, and machinery (down 3.3%, cutting 0.7 percentage points from total sales) and motor vehicles, parts, and transport equipment (down 3.1%, a drop of 0.5 of a percentage point).
“Advance indications provided by the February Absa PMI survey results suggest that the manufacturing sector’s lacklustre performance continued into February,” Hodes said.
Van der Linde anticipates a “continuation of anaemic industrial activity” over the coming months before things could start to improve.
“The brief return of load-shedding has weighed on manufacturers’ sentiment, while the uncertainty about the global economic impact of trade tariffs makes for a gloomier outlook more generally.”
Update: March 13 2025
The story has been updated with comment from economists.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.