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
October 14, 2025

Manufacturing Production

August 2025

In August, South Africa’s manufacturing output further declined by 1.5%, following a 1.3% decrease in July. This downturn was significantly below market expectations, which had forecasted a 0.3% increase for August. The Purchasing Managers’ Index (PMI) also fell by 1.4 points, from 50.8 in July to 49.5 in August 2025, indicating a less favourable business climate anticipated by manufacturers for the month.

The iron and steel sector contracted by 3.3%, detracting 0.7 percentage points from manufacturing growth, while the wood and wood products industry declined by 1.8%, further reducing growth by 0.2 percentage points. These were among the main contributors to the sector’s overall performance downturn.

However, seasonally adjusted manufacturing production increased by 1.5% for the three months ending in August 2025 compared to the previous quarter ending in July. Of the ten industries, six experienced growths, with notable contributions from:

  • Food and beverages, which expanded by 3.1%, contributed 0.8 percentage points.
  • Petroleum, chemical products, rubber, and plastic products, which grew by 2.6%, adding 0.5 percentage points.
  • Motor vehicles, parts, and accessories, which increased by 5.2%, contributed 0.4 percentage points.

Seasonally adjusted manufacturing sales also rose by 3.0% over the same three-month period compared to the previous quarter, with significant increases in:

  • Food and beverages, which grew by 3.2%, adding 0.8 percentage points.
  • Petroleum, chemical products, rubber, and plastic products, which expanded by 3.8%, contributing 0.8 percentage points.
  • Motor vehicles, parts, and accessories, which increased by 4.8%, contributed 0.7 percentage points.

Manufacturing is a vital component of South Africa’s economy, employing approximately 1.6 million people and accounting for 12.5% of the GDP in 2024. Employment slightly decreased from 1.677 million in Q1 2025 to 1.672 million in Q2 2025. Nevertheless, GDP figures for the second quarter reveal a 1.8% quarterly increase in the manufacturing sector’s output. Challenges are anticipated from the third quarter onwards, due in part to US trade tariffs impacting output, sales, and employment.

Despite positive developments in certain industries, business owners are exercising caution amid concerns over US tariffs on exports and ongoing US-China trade tensions. This cautious sentiment is likely to intensify with the recent introduction of a 30% tariff on South African goods entering the US market, effective from August 7, 2025. Nonetheless, companies maintain substantial cash reserves, approximately R1.8 trillion, compared to R1.1 trillion in the first quarter of 2025, according to the Reserve Bank. This reflects a prudent approach 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.