Business

South Africa’s Manufacturing Sector Stuck in the Red for Seventh Month

Published

3 months ago

June 3, 2025

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The heartbeat of South Africa’s economy is pulsing faintly these days. For the seventh month in a row, the country’s manufacturing sector remains in contraction territory, and there’s growing concern that the situation could weigh down the entire economy.

If you’re wondering what’s really going on behind the numbers, here’s a closer look at what’s happening inside the factory gates.

The Latest Numbers Tell a Familiar Story

According to the latest Absa Purchasing Managers’ Index (PMI) for May, the reading dropped to 43.1, down 1.6 points from April. That’s far below the neutral 50-point threshold that separates growth from contraction.

This isn’t a sudden stumble—it’s part of a longer, more stubborn slide. The PMI has been stuck below 50 since late last year, and the May figure only adds to the sense of stagnation in the sector.

What’s more troubling is that this continued weakness is expected to show up in South Africa’s first-quarter GDP numbers, which are due soon. Analysts already warn the report won’t make for cheerful reading.

A Bit of Movement, But Not Enough

There were glimmers of activity in May. Business activity and new sales orders ticked up slightly, hinting at some recovery in local demand. But it wasn’t enough to outweigh other declines—export sales took a significant hit, and supply delivery times also dragged the index lower.

An economist at Absa put it bluntly: “The index had been slightly inflated by earlier supply chain issues. Now that those are easing, we’re seeing the underlying weakness in demand come into sharper focus.”

In other words, it’s not just about goods not arriving on time—it’s about customers not ordering them in the first place.

A Bleak Outlook for GDP

With manufacturing down and logistics still shaky, South Africa’s GDP growth looks set to disappoint. Analysts say most key sectors have been shrinking since the start of the year, with the only bright spot being car sales.

“It’s hard to find the silver lining right now,” one analyst admitted. “We’ve watched indicator after indicator go the wrong way.”

This isn’t just bad news for manufacturers—it’s a warning sign for jobs, investment, and confidence in the country’s economic direction.

Is There Light Ahead?

Interestingly, not all the data is gloomy. Business confidence in the future actually improved sharply in May. The index tracking expectations for business conditions six months from now jumped nearly 14 points to 62.5, the strongest reading since late 2024.

What’s behind this cautious optimism?

Two things: First, relief over the pause on global tariff hikes from the US, which could provide a tailwind for trade. Second, hopes that South Africa’s Government of National Unity might finally find some common ground, resolving some of the political friction that’s slowed down decision-making.

It’s not a celebration yet—but some companies are starting to feel that the second half of 2025 could bring more stability.

What This Means for Everyday South Africans

Behind the stats and acronyms are real consequences. When the manufacturing sector struggles, it affects jobs, household incomes, and local suppliers. A shrinking factory floor often means fewer shifts, delayed payments, and tighter belts across communities.

At the same time, manufacturing is crucial to South Africa’s long-term growth. When it’s healthy, it fuels exports, supports infrastructure, and attracts investment. When it falters, as it is now, the whole economy feels it.

Keep an Eye on the Bigger Picture

South Africa’s manufacturing woes aren’t just about factory machines or supply chains. They’re part of a broader story about where the country is headed—and how much work lies ahead to get it back on track.

For now, the sector is holding on. It’s not growing, but it hasn’t given up either. And with a little more certainty, support, and strategic leadership, a rebound isn’t out of the question.