Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
August 12, 2025

Manufactuting Production

June 2025

In June 2025, South Africa’s manufacturing output increased by 1.9%, marginally exceeding market expectations of 1.8% for the month. Notably, the Purchasing Managers’ Index (PMI) saw a significant rise from 43.1 in May to 48.5 in June, suggesting an expected rebound in manufacturing activity for the month.

The food and beverages sector was a key driver of this growth, expanding by 6.0% and contributing 1.4 percentage points to the overall increase. Similarly, the petroleum, chemical, rubber, and plastics division grew by 1.9% year-on-year in June, adding a further 0.4 percentage points to the sector’s total output.

Seasonally adjusted retail sales increased by 2.4% month-on-month in June. For the second quarter ending in June, sales grew by 1.2% quarter-on-quarter. The largest contributor to this growth was the food and beverages division, which expanded by 3.3%, adding 0.8 percentage points. The motor vehicles, parts, and accessories division also saw a notable increase of 5.5%, contributing another 0.8 percentage points to quarterly growth.

Manufacturing remains a vital component of South Africa’s economy, employing approximately 1.6 million people and accounting for 12.5% of GDP in 2024. Employment figures rose slightly from 1.675 million in Q4 2024 to 1.677 million in Q1 2025, indicating a cautiously optimistic outlook supported by June’s production growth.

Despite these positive signs, business owners remain cautious, adopting a wait-and-see approach amid concerns over US tariffs on exports and ongoing US-China trade tensions. This caution is expected to intensify with the recent introduction of a 30% tariff on South African products entering the US market, effective from August 7, 2025. Nonetheless, companies continue to maintain substantial cash reserves, reflecting a prudent approach amidst current domestic and global economic uncertainties in the short to medium term.

Back to News

More Coverage

A Watershed Moment: Global Ceasefire and Massive Oil Correction Offer Crucial Relief for the SA Economy

A sudden global shift has delivered much-needed relief for South Africa. Following a Middle East ceasefire, oil prices have dropped sharply and the Rand has strengthened—easing pressure on fuel costs and inflation. While earlier price spikes still weigh on the outlook, this combined correction offers a critical window for economic stability, improved consumer confidence, and renewed growth momentum.

The Great Fuel Buffer

South Africa finds itself balancing global energy shocks with decisive local action. As rising oil prices threaten to strain consumers and key industries, government intervention has softened the immediate impact—highlighting both the urgency of the moment and the need for smarter, more resilient fiscal tools to manage future volatility.

SARB opts for Strategic Resilience

The South African Reserve Bank has opted for a “hawkish hold,” maintaining the repo rate at 6.75% despite headline inflation hitting a milestone low of 3.0%. Governor Lesetja Kganyago emphasised that while the inflation target has been met, the MPC remains wary of a potential “energy tax” on the economy, driven by global oil prices surging above $100 per barrel. Consequently, the Bank has adopted a cautious, forward-looking stance, slightly lowering the 2026 GDP growth forecast to 1.1% to account for these external shocks and ensure long-term currency stability.

Navigating the Geopolitical Crosswinds

South Africa faces renewed inflation risks despite brief market relief, driven by rising fuel costs and import dependence. The SARB is likely to hold interest rates to protect price stability.

The Perfect Storm:

This morning, South Africans received what should have been a crowning achievement for the South African Reserve Bank (SARB). Data from Stats SA revealed that the Consumer Price Index (CPI) cooled to 3.0% in February, down from 3.5% in January. This lands the country perfectly on the SARB’s new, more ambitious inflation target.