The manufacturing sector recorded its steepest annual decline in more than a year, with production falling 6.3% year on year in April, according to Stats SA.
The data paints a concerning picture for industrial output, marking the fourth consecutive annual contraction and the largest since early 2024.
The manufacturing sector accounts for about 13% of GDP.
The drop in output was steeper than economists expected.
“The manufacturing sector’s lacklustre outcome is in line with the performance of the Absa purchasing managers index,” remarked Lara Hodes, an economist at Investec. “Specifically, the PMI index moved further into contractionary territory in April, with both the business activity and new sales orders indices declining.”
The downturn was driven by drops in some of the country’s largest and most economically sensitive manufacturing divisions.
The biggest blow came from the food and beverages sector, where output dropped 7.6%, reducing overall manufacturing production by 1.8 percentage points. This was followed by basic iron and steel, nonferrous metals, metal products and machinery, down 6.3% (subtracting 1.4 percentage points), motor vehicles, parts and transport equipment, which fell 13.0% (cutting 1.2 percentage points), and petroleum and chemical products, which declined 4.7% (cutting 1 percentage point).
Together, these four sectors accounted for most of April’s decline, highlighting the broad-based strain across consumer-facing and export-orientated industries.
Despite the sharp annual contraction, seasonally adjusted output rose 1.9% month on month in April, partially rebounding from March’s decline. However, this improvement was not enough to reverse the broader quarterly trend.
In the three months to end-April, manufacturing production fell 1.4% compared with the previous three months. Seven out of 10 divisions reported negative growth during this period, with notable drops in food and beverages, and furniture and “other” manufacturing.
Sales also declined, falling 0.7% month on month in April. This followed a 0.4% drop in March and flat sales in February, indicating persistent weakness in demand.
Over the quarter, seasonally adjusted sales were down 0.3% compared with the previous three months. The largest drag came from the iron and steel, metal products and machinery division.
Hodes quoted the JPMorgan global manufacturing PMI survey, which found manufacturing operating conditions globally deteriorated for the first time in four months in April.
“New orders decreased at the beginning of the second quarter, trade conditions worsened, jobs were cut and business optimism slumped,” she said.
The only lift came from the motor vehicle sector, where sales surged 6.5%, contributing one percentage point to total sales — a rare bright spot in an otherwise muted landscape.
“Advance indications provided by May’s PMI release show that manufacturing sector conditions remained subdued during the month, which doesn’t bode well for the performance of the manufacturing sector in the second quarter, following its unfavourable performance in the first quarter, where it detracted from the overall GDP reading,” Hodes said.
Update: June 10 2025
This story was updated to include an economist’s comment.
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