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
September 12, 2025

Manufacturing Production

July 2025

In July 2025, South Africa’s manufacturing output decreased by 0.7%, slightly below market expectations of a 0.6% decline. The Purchasing Managers’ Index (PMI) increased by 2.3 points, rising from 48.5 in June to 50.8 in July 2025. This suggests manufacturers anticipated a more favourable business climate for that month but didn’t materialise.

The iron and steel industry contracted by 3.3%, detracting 0.7 percentage points from manufacturing growth, while the wood and wood products sector declined by 1.8%, further reducing growth by 0.2 percentage points. These industries were the primary detractors on the sector’s performance.

Seasonally adjusted manufacturing production for the three months ending in July 2025 rose by 2.5% compared to the previous quarter ending in June. During this period, seven out of ten industries saw growth, with significant contributions from:

  • Food and beverages, which grew by 3.4% and added 0.9 percentage points.
  • Petroleum, chemical products, rubber, and plastic products, which increased by 4.1%, adding 0.8% points.
  • Motor vehicles, parts, and accessories, which expanded by 4.8% and added 0.4 percentage points.

Seasonally adjusted retail sales declined by 0.3% month-on-month in July. However, for the rolling quarter ending in July, sales grew by 2.6% quarter-on-quarter. The food and beverages division was the largest driver of this growth, expanding by 4.9% and adding 1.3 percentage points. The petroleum, chemical products, rubber, and plastic products division also saw a notable 4.4% increase, contributing 0.9 percentage points to quarterly growth.

Manufacturing remains a crucial part of South Africa’s economy, employing around 1.6 million people and accounting for 12.5% of the GDP in 2024. Employment rose slightly from 1.675 million in Q4 2024 to 1.677 million in Q1 2025. GDP figures released earlier this week show the manufacturing sector’s output increased by 1.8% on a quarterly basis in the second quarter of 2025. However, the output may face challenges from the third quarter onwards due to the impact of US trade tariffs on output, sales, and employment.

Despite positive developments in some industries, 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 likely to grow with the recent implementation of a 30% tariff on South African products entering the US market, effective August 7, 2025. Nevertheless, companies continue to maintain substantial cash reserves, reflecting a prudent strategy amid current domestic and global economic uncertainties in the short to medium term.

Back to News

More Coverage

South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.