SA manufacturing extended its losing streak in March with output falling for the third consecutive month.
The latest Stats SA data shows production dropped 0.8% year on year, easing from declines of 3.2% in February and 3.3% in January.
The March data came in well below expectations, defying forecasts of a recovery. Investec economist Lara Hodes had projected a 1.2% year-on-year increase, while Nedbank expected a stronger 2.4% rebound, citing base effects from last year and fewer public holidays.
Weakness in petroleum, chemicals, rubber and plastic products, and electrical machinery continued to drag the sector down, despite a slower rate of contraction.
Manufacturing contributes about 12%-13% of SA’s GDP.
After recording modest gains in February, seasonally adjusted production fell 2.2% month on month in March, undoing the previous month’s 0.7% improvement.
On a quarterly basis, seasonally adjusted manufacturing production fell 2.3% in the first quarter of 2025 compared with the fourth quarter of 2024, marking the second consecutive quarterly contraction and confirming the sector is entrenched in a downturn.
Seven out of 10 manufacturing divisions recorded negative growth over the period, with the largest contractions in petroleum, chemical products, rubber and plastics (-3.9%, subtracting 0.8 of a percentage point), food and beverages (-2.4%, subtracting 0.6 of a percentage point) and motor vehicles, parts and accessories, and other transport equipment (-7.0%, subtracting 0.5 of a percentage point).
Manufacturing sales also remained under pressure, declining 0.2% month on month in March after a 0.2% increase in February and a 1.0% contraction in January.
In quarterly terms, seasonally adjusted sales declined 1.1% in the first quarter of 2025 compared with the fourth quarter of 2024. The largest negative contributors were basic iron and steel, non-ferrous metal products, metal products and machinery, down 3.9%, cutting sales by 0.8 percentage points, and motor vehicles and transport equipment, down 3.2%, subtracting 0.5 percentage points.
The positive contributions came from textiles, clothing, leather and footwear, where sales were up 4.5%, contributing 0.1 of a percentage point to total manufacturing sales in the first quarter, and wood and wood products, paper, publishing and printing, where sales rose by 3.7%, contributing 0.2 of a percentage point.
The decline comes as the Absa purchasing managers index (PMI) showed a marked improvement in March, rising by four points to 48.7 — its highest level since October’s 52.6 points.
However, the PMI remained below the neutral 50-point threshold, marking the fifth consecutive month of contraction, the Bureau for Economic Research (BER) and Absa reported last month.
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