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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
November 27, 2025

Producer Price Inflation

October 2025

In October 2025, producer price inflation rose to 2.9%, an increase from 2.3% in September. However, on a monthly basis, there was a slight decline in producer prices, down by 0.1%.

Notable cost increases were observed in the following categories:

  • Food and beverage production increased by 3.1%, contributing 0.9 percentage points to the monthly rise.
  • Coke, petroleum, chemical, rubber, and plastic products saw a 2.5% increase, contributing 0.5 percentage points to the monthly rise.
  • Furniture and other manufacturing production rose by 11.2%, also contributing 0.5 percentage points to the monthly increase.

The previous deflationary trend in producer inflation seems to have ended, with only petrol prices experiencing a decline – down 2.7% year-on-year in October 2025.

Production costs for intermediate goods rose by 10.9% in October, following a 7.6% increase in September. This indicates a clear inflationary trend that necessitates attention, as this level of increase exceeds the South African Reserve Bank’s (SARB) new inflation target range of 2% to 4%. The month-on-month increase of 2.7% further suggests that inflationary pressures are emerging in the manufacturing of intermediate goods. The annual growth is still heavily influenced by base effects from data in 2024. The monthly increase was primarily driven by Basic and Fabricated Metals, which increased by 3.7%, contributing 0.9 percentage points to the overall figure.

In the primary sector, mining costs rose by 18.4% in October, following a 16.0% increase in September. In contrast, the agriculture sector faced a 1.8% decrease after experiencing a 2.1% decline in September.
Overall, the trend in producer price inflation for final manufactured goods currently supports positive inflation expectations in South Africa for the short to medium term. Consumer inflation remains low at 3.6% for October, closely aligned with the SARB’s target of 3%. Although prices for certain intermediate goods – particularly water and electricity – exceed the target range, current figures indicate that consumer inflation is likely to remain low and stable in the near future.

This stability provided the Reserve Bank with the opportunity to lower interest rates during the November Monetary Policy Committee (MPC) meeting, as both consumer and producer inflation expectations appear to be well managed at this time.

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