South Africa’s manufacturing sector took a sharp turn for the worse in November, with the Absa purchasing managers’ index (PMI) plunging by 7.2 points to 42 — its lowest reading since the Covid-19 pandemic in April 2020.
According to the Bureau for Economic Research (BER), the deterioration was broad-based, with four of the five sub-indices deteriorating. The only element to show a mild improvement was employment, which rose slightly but remained below the neutral 50-point mark. A reading above 50 points signals expansion in activity, while a reading below 50 indicates contraction.
The Absa PMI is one of the most closely watched leading indicators of economic activity. It provides an early snapshot of business conditions in the manufacturing sector, often before official production and GDP data are released.
“It was definitely below expectations,” said Investec economist Lara Hodes.
The BER also noted “the PMI is a direct result of the movements of the indices, which are based on, for example, changes in activity and demand, rather than a sentiment measure”.
According to Oxford Economics senior economist Jee-A van der Linde, the manufacturing sector is experiencing strain “due to weak domestic demand for manufactured goods and the impact of US import tariffs”.
“South Africa’s manufacturing outlook has dimmed, as the country’s merchandise exports to the US — generally diversified and higher value-added — face increased pressure,” he said.
“The delayed impact of US tariffs is gradually affecting the domestic economy.”
Business activity fell steeply to 36.7 in November, down from 49.4 in October, marking the weakest reading in seven months. The BER said the pullback followed a short-lived period of stability in the third quarter, when the PMI briefly edged above 50. “While the index has been volatile, the persistent weakness is also reflected in the lack of traction seen in official manufacturing data,” it said on Monday.
The new sales orders index also tumbled, dropping to 35.6 from 48.9, as demand in both domestic and export markets faltered. Respondents said export sales remained subdued, but most of the renewed decline probably stemmed from the local economy, where activity slowed sharply after a brief recovery.
Despite the downturn in activity, the employment index rose for the second straight month to 46.2, suggesting some stabilisation, though job creation remains far off.
“While still below the neutral 50-point mark, the index is above the average recorded in the first 10 months of 2025,” the BER said.
The inventories index slipped to 46, its lowest level since May, as manufacturers continued to run down stocks of raw materials and intermediate goods used in the production process.
The supplier deliveries index fell sharply to 45.5. While the drop could suggest faster delivery times, the BER noted that this probably reflects weaker demand rather than genuine improvements in logistics. The report said there were some signs of better functioning at local ports, although operations in Cape Town were hampered by strong winds during the month.
There was at least one bright spot: input cost pressures eased significantly. The purchasing price index dropped 7.4 points to 54.5, thanks to a stronger rand and lower international oil prices.
“A stronger rand exchange rate and lower oil price during the month likely drove this decline, with a sticky diesel price (closely linked to petroleum product prices) likely preventing a bigger drop. If sustained, lower cost pressure on manufacturers should, over time, contribute to lower consumer inflation in the economy,” the BER said.
The index tracking expected business conditions in six months’ time ticked up to 50.8 from 46.1 in October, suggesting a cautiously improved outlook heading into 2026. However, confidence remains well below the long-term average.
Update December 1 2025 This story has been updated with economists’ comments.
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