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
November 12, 2025

Manufacturing Production

September 2025

In September, South Africa’s manufacturing output experienced a modest increase of 0.3%, following a 1.5% decline in August. This growth was slightly below the market forecast of a 1.0% increase for the month. The Purchasing Managers’ Index (PMI) rose by 2.7 points, reaching 52.2 in September 2025 from 49.5 in August. This suggests a modest improvement in the business climate anticipated by manufacturers for September.

The motor vehicles, parts, and accessories division, along with other transport equipment, was the largest contributor to manufacturing growth, rising by 7.6% and adding 0.5 percentage points to the overall performance. Additionally, the food and beverages sector grew by 1.8%, contributing another 0.5 percentage points. These sectors were significant drivers of the sector’s overall performance upswing for September 2025.

However, when seasonally adjusted, manufacturing production only saw a 0.1% increase in the third quarter compared to the previous quarter. Of the ten industries surveyed, four reported growth, with the noteworthy contributions from:

  • Food and beverages, which expanded by 1.9%, contributing 0.5 percentage points.
  • Furniture and other divisions, which grew by 8.4%, adding 0.3 percentage points.

The wood and wood products sector contracted by 5.4%, detracting 0.6 percentage points from the quarterly growth figure.

Seasonally adjusted manufacturing sales rose by 1.9% during the third quarter compared to the previous quarter, with significant growth in:

  • Petroleum, chemical products, rubber, and plastic products, which increased by 3.4%, contributing 0.7 percentage points.
  • Basic iron and steel, non-ferrous metal products, metal products, and machinery, which grew by 1.9%, adding 0.4 percentage points.
  • Motor vehicles, parts, and accessories, which rose by 2.5%, also contributing 0.4 percentage points.

Manufacturing is a key component of South Africa’s economy, employing around 1.6 million people and comprising 12.5% of GDP in 2024. Employment inched down from 1.672 million in Q2 2025 to 1.610 million in Q3 2025. Nevertheless, GDP figures for Q2 showed a 1.8% increase in manufacturing output. If current monthly data is analysed, a slight increase is expected again for Q3. Challenges are anticipated from Q3 onwards, partly due to US trade tariffs affecting output, sales, and employment. Tensions have risen recently, with President Trump criticising South Africa and its position in the G20.

Despite some positive developments in various sectors in September, business owners remain cautious due to concerns over US tariffs on exports and ongoing US-China trade tensions. This cautious sentiment is reflected in businesses holding R1.8 trillion in cash reserves in commercial banks, poised to reinvest in South Africa if conducive economic policies and conditions are established to boost business confidence and unlock the country’s growth potential in the medium to long 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.