The manufacturing sector lost momentum in October, with the Absa purchasing managers’ index (PMI) falling by 1.6 points to 49.2.
The decline pushed the index back into contractionary territory (below 50) after just one month of modest growth.
The Absa PMI provides an early snapshot of business conditions in the manufacturing sector, often before official production and GDP data are released.
Because manufacturing is a key driver of jobs, exports and investment, changes in the PMI help economists, investors and policymakers gauge the health and momentum of the broader economy.
According to the Bureau for Economic Research (BER), manufacturing activity remained under pressure as both domestic and export demand weakened.
Respondents noted that local demand was quieter than usual for this time of year, while export orders continued to be constrained by renewed US trade tariffs and ongoing logistical bottlenecks.
Business activity dropped by five points to 49.4 in October, reversing most of September’s gains but still marking the second-highest reading for 2025.
New sales orders also fell, sliding 3.9 points to 48.9, as manufacturers faced sluggish demand at home and abroad. Exports contracted for the seventh consecutive month, extending a long run of weak trade performance.
The employment index rose 2.2 points to 45.1, recovering slightly from September’s drop but remaining well below the neutral 50 mark.
Manufacturers continue to hold back on hiring amid slow growth and volatile output trends.
The inventories index was unchanged at 48.8, suggesting that stock levels remain tight as firms adjust production to match lower demand. Supplier deliveries fell 1.4 points to 53.5.
It remains to be seen whether this decrease (signalling faster delivery times as the index is inverted) is due to the contraction in new orders or recent news of a better-performing port in KwaZulu-Natal, the BER noted.
Cost pressures edged higher in October, with the purchasing price index rising marginally by 0.2 points to 61.9.
The rand remained relatively firm through the month, while fuel price movements were mixed. Petrol prices increased slightly, but diesel prices declined.
A worrying sign emerged in sentiment. The index measuring expected business conditions in six months’ time dropped sharply from 49.2 in September to 46.1, the lowest level since April.
Oxford Economics senior economist Jee-A van der Linde said: “This is consistent with our view that US tariffs will have a delayed impact on the economy.
“We still believe that SA’s manufacturing sector outlook has dimmed due to US tariffs, particularly given that the country’s merchandise exports to the US are generally more diversified and comprise higher value-added goods.”
Update: November 3 2025
This story has been updated with an economist’s comment
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