SA’s manufacturing sector posted a rebound in June, with output rising 1.9% year on year — a turnaround that is set to lift GDP after the sector dragged on growth in the opening months of this year.
But this doesn’t mean the sector, which accounts for about 13% of GDP, is out of the woods.
“While the improvement in SA manufacturing activity during [the second quarter of] 2025 is extremely welcome, it is not clear if the uplift will be sustained given the 30% import tariff imposed by the US and a persistently weak level of business confidence in SA,” Stanlib chief economist Kevin Lings said.
Lara Hodes, Investec economist, added that the recently announced 30% tariff on exported goods to the US will “adversely affect a number of domestic industries, including manufacturing, weighing on already subdued business confidence”.
Month on month, manufacturing production was unchanged, with Lings saying the stagnant performance was “well below market expectations” for an increase.
Quarter on quarter, seven of the ten manufacturing divisions reported positive growth rates. The petroleum, chemical products, rubber and plastic products category was the largest contributor, up 4.3% and adding 0.9 of a percentage point.
The motor vehicles, parts and accessories and other transport equipment division followed, increasing 9.8% and contributing 0.7 of a percentage point.
The largest positive contribution in June came from the food and beverages division, which grew 6% and added 1.4 percentage points to total output. Petroleum, chemical products, rubber and plastic products also supported growth, increasing 1.9% and contributing 0.4 of a percentage point.
Manufacturing sales strengthened. Seasonally adjusted sales rose 2.4% in June compared with May, after increases of 2.1% in May and a 0.5% decline in April.
In quarterly terms, sales were up 1.2% in the second quarter compared with the first. The largest positive contributions came from food and beverages, which grew 3.3% and added 0.8 of a percentage point, and motor vehicles, parts and accessories and other transport equipment, which rose 5.5% and also contributed 0.8 of a percentage point.
Lings said the sector had yet to fully recover from the impact of Covid-19, and while the improvement in the second quarter of 2025 was welcome, “it is not yet sufficient to conclude that the sector has entered a growth phase”.
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