Skip to main content
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
November 12, 2026
South Africa’s manufacturing sector is sending mixed signals: output fell more sharply than expected in September, while the PMI edged higher but remained below the level that signals confidence. The latest figures reveal which industries drove the decline, how quarterly sales and employment moved in the opposite direction, and why manufacturers remain cautious amid US tariffs and shrinking export access. With manufacturing supporting millions of livelihoods and a significant share of the economy, the full report unpacks what these trends could mean for growth, jobs and business resilience.

Manufacturing Production – September 2026

In September 2026, South Africa’s manufacturing output contracted by 3.5%, following the 4.1% contraction in August 2026. This decrease is notably worse than the 2.0% decrease analysts forecast for September 2026. During the same period, however, the Purchasing Managers’ Index (PMI) increased by 2.7 points, from 46.0 in June 2026 to 48.7 in September 2026. This indicates a cautious view of the business environment, with output contracting within the sector, while the sector-wide confidence level remained below the neutral mark of 50.0 index points.

Bar and line chart of South African manufacturing production, year-on-year percentage change, October 2014 to October 2026, with 2021 and mid-2022 shaded as normalised for Covid distortion
Manufacturing Production: YoY%

The decrease in manufacturing production during September was largely attributed to declines in:

  • motor vehicles, parts and accessories and other transport equipment production, which decreased by 15.0% and subtracted 1.1 percentage points,
  • wood and wood products, paper, publishing and printing that declined by 11.2% and which contributed -1.1 percentage points to output contraction,
  • furniture and ‘other’ manufacturing production, which decreased by 19.0% and subtracted 0.8 percentage points, and
  • basic iron and steel, non-ferrous metal products, metal products and machinery production, which decreased by 3.7% and subtracted 0.8 percentage points
Production Volumes
Division Relative size MoM% YoY%
Aug-26Sept-26 Aug-26Sept-26
Radio, television and communication apparatus and professional equipment1.1%15.3%2.5%0.0%−0.4%
Electrical machinery2.1%−10.1%4.8%−7.1%3.5%
Glass and non-metallic mineral products3.1%−3.8%7.5%−2.1%4.2%
Textiles, clothing, leather and footwear4.1%−1.3%−0.2%6.0%5.2%
Furniture and Other manufacturing groups4.2%−8.6%2.2%−17.7%−24.9%
Motor vehicles, parts and accessories and other transport equipment8.7%−4.3%−11.6%−8.9%−15.0%
Wood and wood products, paper, publishing and printing10.5%6.3%−3.6%−7.0%−11.2%
Basic iron and steel, non-ferrous metal products, metal products and machinery20.0%−4.8%4.2%−3.4%−3.7%
Food and beverages21.4%−5.1%10.8%−1.3%0.4%
Petroleum, chemical products, rubber and plastic products24.9%−1.0%4.0%−4.9%−0.4%
Total manufacturing production100.0%−2.9%3.7%−4.1%−3.5%

Seasonally adjusted manufacturing production for the third quarter of 2026 remained flat, with month-on-month changes of -3.0% and -2.1% for July and August, respectively. Out of ten sectors, five reported increases during this period. Significant contractions included:

  • Food and beverage production, which increased by 4.9% and contributed +1.2 percentage point, and
  • Higher output in basic iron and steel, non-ferrous metal products, metal products and machinery, which increased by 1.2% and contributed +0.3 points towards the contraction in manufacturing output for June.

Seasonally adjusted manufacturing sales increased by 3.2% during the third quarter of 2026. Significant increases were, however, recorded in:

  • Petroleum, chemical products, rubber and plastic products division, which increased by 4.4%, adding 1.0 percentage points towards sales growth for the quarter.
  • The motor vehicles, parts and accessories and other transport equipment division, which rose by 10.9%, added another 1.5 percentage points towards sales growth for the quarter under review, and
  • Food and beverage sales, which increased by 3.4% and contributed +0.9 percentage point, and
Value of Sales: Seasonally Adjusted
Division R million Relative size MoM% YoY%
Aug-26Sept-26 Aug-26Sept-26 Aug-26Sept-26
Radio, television and communication apparatus and professional equipmentR2 580 207R2 699 2500.9%1.4%4.6%5.0%11.5%
Textiles, clothing, leather and footwearR7 015 810R6 938 1032.2%−1.9%−1.1%3.5%4.7%
Electrical machineryR6 970 364R7 174 4612.6%−3.2%2.9%2.5%9.4%
Glass and non-metallic mineral productsR8 798 911R9 086 3142.8%−1.2%3.3%1.2%7.4%
Furniture and Other manufacturing groupsR9 039 517R8 945 6913.0%−2.0%−1.0%−2.4%−15.4%
Wood and wood products, paper, publishing and printingR17 717 059R15 817 2376.4%−1.6%−10.7%−1.1%−11.4%
Motor vehicles, parts and accessories and other transport equipmentR48 426 131R42 483 84416.9%7.6%−12.3%10.4%−6.0%
Petroleum, chemical products, rubber and plastic productsR67 460 206R67 982 08820.2%4.3%0.8%8.3%7.9%
Basic iron and steel, non-ferrous metal products, metal products and machineryR57 740 999R58 264 12321.2%0.0%0.9%−0.4%1.2%
Food and beveragesR75 969 330R75 606 47723.8%−2.0%−0.5%0.1%−0.1%
Total value of manufacturing salesR303 707 095R297 012 031100.0%1.3%−2.2%3.4%0.4%

Manufacturing remains a cornerstone of the South African economy, sustaining roughly 1.57 million jobs and contributing 12.5% to GDP in 2025. However, the sector faces mounting pressure. Headcount increased slightly from 1.571 million in Q2 2026 to 1.604 million in Q3 2026. Lower production volumes, as seen in the latest manufacturing data released by STATSSA, indicate that the trade tariffs imposed by the United States since August 2025 have severely strained the sector, eroding price competitiveness in the US market as tariff-driven duties inflate landed costs for local exporters.

The increase in employment in this sector comes as a welcome surprise, while the decrease in output underscores how these market-access hurdles are filtering through to headline growth and labour absorption across the broader industrial base. Notably, South African exports to the US have plummeted by 56% since 2025, driven by trade friction, tariff barriers, and diplomatic strains between Pretoria and Washington.

Consequently, manufacturer sentiment has remained below the critical 50-point index mark for September, echoing the cautious approach South African manufacturers are adopting amid higher tariffs and reduced market access in the US. Despite these headwinds, South African corporates continue to bolster their balance sheets. South African Reserve Bank data reveal that private-sector cash holdings reached approximately R1.8 trillion in Q2 2026, up sharply from R1.1 trillion in Q1 2025, demonstrating a defensive, capital-preservation posture amid short- to medium-term global and domestic volatility.

Back to News

More Coverage

Why Stats SA’s Q3 Employment Rebound Masks an Escalating Rural and Informal Crisis While Statistics South Africa’s Q3:2026 Quarterly Labour Force Survey reports an apparent rebound of 101,000 in total employment driven by resilient formal corporate hiring (+268,000, led by finance, manufacturing, and mining), this headline growth conceals a severe structural divergence. Official unemployment rose to 33.7%, drastically missing consensus expectations of 32.5%, while the expanded unemployment rate worsened to 44.0%, driven by demographic expansion outstripping job creation and the near-total blowout of the economy’s traditional safety valves. Over the past year, the informal economy has shed an alarming 485,000 jobs (-12.2% YoY), while private household employment contracted by 68,000 in Q3 alone. Concurrently, primary agriculture shed 34,000 jobs (-3.6% QoQ), with skilled commercial agricultural employment plunging 47.5% YoY amidst emerging El Niño drought risks, depressed business confidence (RMB/BER BCI at 38), and looming trade headwinds from South Africa’s anticipated loss of AGOA market access after 1 January 2027. The attached opinion piece and press release provide an in-depth analysis of what these figures mean for investment strategy, business sentiment, and the structural reforms urgently required to avert deeper rural and informal displacement.
South Africa’s third-quarter 2026 employment figures offer a mixed picture: Manufacturing and Mining added jobs, and employment rose in several provinces, yet unemployment continued to climb and came in well above market expectations. With the working-age population also growing and global trade tensions, Middle East conflict and uncertainty over AGOA adding to the pressure, the latest data raise important questions about the pace and sustainability of job creation. Read the full report for a closer look at what’s driving the numbers, and which sectors and provinces may be most exposed.
With Botswana announcing plans to double its stake in De Beers from 15% to 30% alongside Anglo American’s historic disposal, we have published an executive analysis examining the investment calculus behind this landmark transaction: “Botswana Wants a Bigger Share of De Beers. But Is Bigger Ownership Always Better?” While securing a larger sovereign footprint reasserts domestic resource sovereignty, disciplined capital allocators must weigh whether Gaborone is acquiring a strategic bargain or dangerously compounding national exposure to an industry wrestling with structural disruptions from lab-grown synthetics and muted global luxury demand. Our piece breaks down how institutional investors should evaluate distressed commodity assets, the balance sheet realities of unlisted co-ownership, and what Anglo’s unbundling means for South African portfolios and regional SADC market confidence.
As global financial markets grapple with unprecedented concentration in a handful of mega-cap technology champions, our latest macroeconomic analysis, “The Nvidia Effect: When Global Markets Become Too Dependent on a Few Companies,” examines why uncertainty surrounding a single silicon powerhouse now exerts more systemic influence over global indices than traditional economic indicators. The piece explores how passive ETF capital flows mechanise market vulnerability, why shift-prone investor sentiment triggers severe multiple contractions even when corporate earnings fundamentals remain immaculate, and how South African investors taking capital offshore to hedge local risk have inadvertently fallen into a concentration trap by holding the exact same tech giants across different international feeder funds. We outline actionable, structural strategies for local wealth managers, institutional allocators, and individual investors to unbundle this risk and build authentic portfolio resilience.
The AGOA Reckoning: Weighing the Real Cost to Jobs, Industry, and the Fiscus Following the US administration’s confirmation that South Africa will be removed from the African Growth and Opportunity Act (AGOA) in January 2027, within a 60-day notice period, our latest economic analysis evaluates the severe consequences for the domestic economy. With an estimated 125,000 to 570,000 direct and indirect jobs now on the line, predominantly across automotive manufacturing in the Eastern Cape and agricultural fruit exports in the Western Cape, this trade shock hits an economy where unemployment already sits at an elevated 33.6% (43.8% expanded) and manufacturing contracted by 3.1% in Q2 2026. While Pretoria’s proposed “Plan B” seeks alternative export corridors via the Butterfly Strategy, it ignores the structural reality that Asian export powerhouses like China absorb raw mineral commodities rather than assembled finished goods, even as heavily subsidised Chinese imports continue to erode local industrial capacity. Left unaddressed, this loss of trade preference risks igniting a vicious fiscal transmission loop: triggering steep contractions in PAYE and VAT receipts, ballooning social grant expenditure, elevating sovereign borrowing, and driving up long-term bond yields at the very moment the fiscus was beginning to turn the corner. The attached comprehensive article and press release make the case for urgent, pragmatic economic diplomacy over political posturing to protect our industrial base and sovereign balance sheet.