South African Manufacturing Slips Back into Contraction: Absa

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.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell further to 40.5 in December 2025 from 42 in November. The latest reading signaled a third straight month of contraction in the country’s manufacturing sector, which was the steepest since April 2020, amid sharp declines in inventories and employment. The inventories sub-index dropped 9.9 points to 36.1, its lowest level since May 2020, while the employment sub-index fell 6.3 points, remaining well below the neutral 50-point mark and in contractionary territory since April 2024. "The weak performance in business activity and volatile sales orders continues to limit the scope for hiring, while shortages of specialised skills in certain niche industries also weigh on employment outcomes," said Absa.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell for the second month to 42 in November 2025 from 49.2 in the previous month. The latest reading indicated a second straight month of contraction in the country’s manufacturing sector, worsening from the previous month and marking the sharpest decline since April 2020. Absa said the reading highlights the sector’s fragility, with weak domestic demand, subdued exports, and sluggish output, despite easing cost pressures and early improvements in logistics. The biggest drag were the new sales orders index, which plunged to 35.6 in November from 48.9 in October, pushing the business activity index down to 36.7. Inventories fell to 46.1, the lowest since May, while employment rose slightly but stayed in negative territory. On a brighter note, cost pressures eased, and the expected business conditions index returned to positive territory at 50.8 after two months of pessimism.