Prevailing issues such as shipment delays, localised electricity disruptions, and weak demand continue to hamstring the sector.
Manufacturing activity in South Africa took another knock in February, as the seasonally adjusted Absa Purchasing Managers’ Index (PMI) slipped further into negative territory.
The headline index, released on Monday, fell from 48.7 to 47.4, a worrying sign that the manufacturing sector is losing momentum and struggling to regain its footing.
Absa PMI is an economic activity index based on a survey conducted by the Bureau for Economic Research (BER) and sponsored by Absa. It measures the health of South Africa’s manufacturing sector.
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PMI subcomponents remain unchanged
The index noted that most of the PMI subcomponents remained broadly unchanged from January, but weaker business activity and a further decline in employment weighed on the headline index.
“Following an encouraging improvement at the start of the year, the business activity index more than reversed January’s gains and fell back below the neutral 50-point mark,” reads the index.
“This suggests that a possible rebound in production at the beginning of the year was not sustained. 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.”
New sales orders in manufacturing
The index noted that new sales orders were largely unchanged in February after January’s solid rebound.
According to the data, export sales looked better than in January but remain deep in negative territory.
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“Although the stronger rand is beneficial from a cost perspective, it continues to weigh on international competitiveness,” read the index.
“The positive highlight of the February PMI results was the renewed uptick in the expected business conditions index. The index rose back to December’s 68.8 points, from 66.4 in January.”
Employment index ticked down
According to the index, employment in the manufacturing sector declined once more in February. The latest Quarterly Labour Force Survey (QLFS) results for the fourth quarter of 2025 showed that manufacturing lost jobs on a quarterly basis.
“The PMI results do not point to a meaningful recovery in Q1,” reads the index.
“The commentary from respondents about conditions in February remained on balance negative; however, some expressly anticipate that the outlook will improve.
“Prevailing issues plaguing the sector include shipment delays at South African ports, localised electricity disruptions, and weak demand.”
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