South Africa’s manufacturing sector posted its second consecutive monthly decline in December 2024, reflecting ongoing pressure from subdued domestic and international demand. According to the latest Absa-sponsored Purchasing Managers’ Index (PMI), the seasonally adjusted figure slipped to 46.2 points in December, compared to 48.1 points in November. Since readings below 50 indicate contracting activity, these figures suggest that Africa’s most industrialized economy faces persistent hurdles in reinvigorating its factory output.
The decline comes on the heels of a volatile year for manufacturers, with Absa noting that December’s slump effectively reversed the modest improvements observed in September and October. The business activity index dropped by 8.7 points to 40.3, reflecting a significant slowdown in production, while the new sales orders sub-index also registered a decline. Analysts point out that these trends are particularly troubling, given that December figures typically benefit from holiday-related demand in certain consumer segments.
Despite the softer performance, there is a silver lining. The sub-index measuring manufacturers’ optimism about business conditions in six months rose in December. This uptick suggests that many industry players anticipate a potential turnaround in the near future. Some observers maintain that improved global economic conditions, coupled with a more stable domestic power supply, could pave the way for gradual recovery.
However, recent export sales numbers retreated to levels last seen in the first half of 2024, indicating that South African manufacturers may need to explore new markets or diversify their product offerings. Meanwhile, supplier delivery times edged above 50 points for the first time in three months, hinting at improved logistical efficiency in certain parts of the supply chain.