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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
May 14, 2026

anufacturing Production – March 2026

Discover the surprising resilience of South Africa’s manufacturing sector in March 2026, where a remarkable 0.9% increase defied analysts’ expectations following a 2.3% slump in February. This unexpected growth, propelled by expansion in key sectors like food and beverages, petroleum, and electrical machinery, suggests a positive shift in business sentiment. Despite a quarterly downturn, manufacturing sales edged upward, signalling underlying strength amidst international trade tensions and tariffs. Uncover how South Africa’s industry navigates these choppy waters by maintaining robust cash reserves, hinting at strategic adaptations to the evolving economic landscape. Dive into this comprehensive analysis to understand the delicate interplay of growth factors and challenges shaping the future of South Africa’s manufacturing sector.

In March 2026, South Africa’s manufacturing output increased by 0.9%, following the 2.3% decline in February 2026. This increase is better than the 1.0% decline analysts forecast for February 2026. During the same period, the Purchasing Managers’ Index (PMI) increased 1.2 points, from 47.4 in February 2026 to 49.0 in March 2026. This indicates a positive view of the business environment as output expanded within the sector.

The food and beverages sector expanded by 3.5%, contributing 0.9 percentage points to the increase in overall manufacturing growth. Similarly, the petroleum, chemical products, rubber, and plastic products industry saw growth increase by 1.8%, adding an additional 0.4 percentage points, while the electrical machinery industry rose by 11.9%, adding an additional 0.3 percentage points towards manufacturing growth during this period. These sectors were significant contributors to the industry’s better-than-expected performance in March.

Seasonally adjusted manufacturing production decreased by 1.0% for the quarter ending March 2026 compared to the previous quarter. Out of ten sectors, five reported contractions during this period. Significant contractions included:

  • Basic iron and steel, non-ferrous metal products, metal products and machinery contracted by 1.4%, subtracting 0.3 percentage points from growth.
  • Petroleum, chemical products, rubber and plastic products, declined by 3.4%, subtracting 0.7 percentage points from growth.
  • Wood and wood products, paper, publishing and printing, which decreased by 2.4%, also contributed a 0.2 percentage point reduction.

Seasonally adjusted manufacturing sales increased by 0.4% during the quarter ending March 2026 compared to the previous quarter. Significant declines occurred in:

  • Basic iron and steel, non-ferrous metal products, metal products and machinery, which declined by 3.1%, adding 0.6 percentage points towards sales growth for the quarter.
  • The glass and non-metallic mineral products, which rose by 9.9%, added another 0.3 percentage points towards sales growth for the quarter under review.

Manufacturing is a critical component of South Africa’s economy, employing approximately 1.58 million people and accounting for 12.5% of the GDP in 2025. Employment slightly increased from 1.548 million in Q4 2025 to 1.587 million in Q1 2026. GDP figures for the fourth quarter indicate a 0.6% quarterly decrease in manufacturing output, suggesting that US trade tariffs since August 2025 have caused some distress in the manufacturing sector by eroding price competitiveness in the US market, driven by higher import prices from tariffs imposed on South African-produced export goods.

As a result of trade tariffs with the US and ongoing diplomatic tensions between Pretoria and Washington, business owners remain cautious, as evidenced by the March 2026 PMI data. However, companies are still maintaining substantial cash reserves of approximately R1.8 trillion, up from 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.

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