South Africa Factory Activity Returns to Growth: Absa

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 49 in March 2026 from 47.4 in February, but the reading still pointed to the sixth consecutive month of contraction in the country’s manufacturing sector. "The PMI results overall suggest South Africa's manufacturing sector has not yet experienced a significant slowdown due to the US-Israel war against Iran, but price pressures have intensified sharply", Absa said. New orders remained weak, reflecting subdued demand, while slower supplier deliveries pointed to ongoing supply chain and logistical challenges. Meanwhile, input costs were pushed higher by a weaker rand and higher international oil prices. Lastly, the sub-index tracking expected business conditions posted its steepest drop ever, reflecting worries about the impact of the Iran conflict on costs and demand.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell to 47.4 in February 2026 from 48.7 in January, marking the fifth consecutive month of contraction in the manufacturing sector. The downturn was slightly sharper, reflecting weaker business activity and continued job losses. Business conditions remained under pressure from port delays, localized power outages, and subdued demand. On a brighter note, the sub-index tracking anticipated business conditions showed improvement. "The stop-start nature of manufacturing output, also evident in official data, is not conducive to longer-term capacity expansion, investment growth or employment gains," Absa noted.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 48.7 in January 2026 from 40.5 in December, which was the weakest reading since April 2020. Although signaling a fourth consecutive month of contraction in manufacturing, the pace of decline eased notably. The improvement was primarily driven by a rebound in business activity, with the relevant sub-index rising above 50 to 51.4 from 46.1 in December. At 45.4, new sales orders continued to contract but at a reduced rate. Meanwhile, export conditions deteriorated sharply in January, with exports falling to their lowest level since the Covid-19 pandemic. The inventories index increased by 11.1 points to 47.2, from 36.1 in December, albeit still below 50 points. The employment index recovered modestly to 43.9 from 39.9 but remained the weakest sub-index. Business confidence edged down slightly to 66.4 but stayed well above the 2025 average, indicating expectations of improvement over the next six months.