South African Manufacturing Slips Back into Contraction: Absa

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell further to 45.8 in August 2026 from 46.8 in July, marking the third consecutive month of contraction in factory activity and the steepest since last December. Business activity plunged to 40.2, its lowest level this year, while new orders fell to 40.3, erasing July’s gains. The deterioration was largely domestic, reflecting subdued demand, weak consumer confidence and reduced spending on non-essential goods, while export sales provided some relief. The labour market also remained under pressure, but the pace of factory job losses slowed. Despite the downturn, manufacturers became more confident about the future, with the index measuring six-month expectations rising to 54.7 from 49.3 and returning above the neutral threshold. The stronger outlook suggests firms see the current weakness as temporary, although weak orders and production remain significant near-term headwinds.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) dropped to 46.8 in July 2026 from 47.3 in June, contracting for a second consecutive month. Domestic demand and production continued to recover, with shorter supplier delivery times. Inventories declined further as firms remain uncertain that strong demand will persist, although some firms could be delaying purchases expecting lower input costs in the future. Input cost pressures remain elevated relative to the pre-war period, with increases in diesel prices expected to put renewed pressures on costs. Nevertheless, peak inflationary pressures have likely passed, barring any further upsurge in global energy costs. Looking ahead, firms expect business conditions to weaken as renewed tensions in the Middle East push up oil prices, making firms questions the durability of recent improvements in activity.

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) dropped to 47.3 in June 2026 from 50.8 in May, signaling renewed contraction in factory activity after two consecutive months of growth. This mainly reflected weaker demand, which weighed on new orders. Clients reportedly placed fewer orders as some customers delayed purchases in anticipation of lower prices, weighing on new business even as cost pressures eased. Nevertheless, confidence about future business conditions improved strongly amid lower oil prices. Absa said the survey was conducted after the US and Iran agreed an interim deal to end the conflict and reopen the Strait of Hormuz, which prompted a pullback in global oil prices. It added that a sharp decline in the PMI purchasing price component suggested April and May may have marked the peak of price pressures.