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March 27, 2025

Manufacturing Production

January 2025

Manufacturing production in South Africa decreased by 3.3% in January 2025, following a 1.2% contraction in December 2024. This decline was anticipated, as the Purchasing Managers’ Index (PMI) slipped from 46.2 in December to 45.3 in January.

The drop in production volumes can be attributed to several key factors:

  • Petroleum, Chemical Products, Rubber, and Plastic Products: Production fell by 9.1%, contributing -2.1 percentage points to the overall decline in manufacturing.
  • Motor Vehicles, Parts, and Accessories: This sector experienced a notable decrease of 10.1%, subtracting -0.8 percentage points.
  • Food and Beverages: Production in this sector declined by 3.2% year-on-year, contributing another -0.8 percentage points.

In contrast, the wood and wood products sector saw an increase of 5.6%, adding 0.6 percentage points to total output growth.

The seasonally adjusted value of sales in the manufacturing sector decreased by 2.0% in January 2025 compared to January 2024. Additionally, the rolling quarter ending in January 2025 showed a decline of 0.9% compared to the previous quarter ending in October 2024. Key contributors to this decline included:

  • Motor Vehicles, Parts, and Accessories: This sector fell by 3.1%, contributing -0.5 percentage points.
  • Basic Iron and Steel, Non-Ferrous Metal Products, Metal Products, and Machinery: This category decreased by 3.3%, adding -0.7 percentage points to the quarterly contraction.

Manufacturing remains a vital sector in South Africa, being the most industrialised country on the African continent. It employs approximately 1.6 million people and contributes about 12.5% to the nation’s GDP. Recent employment statistics reveal a positive trend, with job numbers rising from 1.635 million in Q3 to 1.675 million in Q4 of 2024. This increase is encouraging, particularly given the relatively stable electricity supply and consistent PMI figures in the final stages of 2024.

However, manufacturing business owners are adopting a cautious “wait-and-see” approach to investment and medium-term growth. Rising diplomatic tensions between Pretoria and Washington may lead to potential trade restrictions on South African manufactured goods in the near future. Reports from the Reserve Bank and commercial banks indicate that corporate South Africa is holding significant cash reserves, suggesting that companies are awaiting clarity from the Government of National Unity (GNU) regarding industrial policy, promised reforms, and resolutions to the ongoing standoff with the U.S.


More Coverage

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.
A Balanced Path to Growth, Jobs, and Prosperity
South Africa faces significant economic challenges that threaten the nation’s stability and future prosperity. Over the past decade, sluggish growth, high unemployment—particularly among the youth—and infrastructure decay have become critical issues. These problems are compounded by inconsistent policies, energy shortages, and a prevailing uncertainty in the investment climate. The African National Congress (ANC) has recognised this urgency, unveiling a ten-point plan aimed at revitalising the economy. While this approach shows a concerted effort to address systemic issues, a complementary set of reforms proposed in the Alternative Economic Blueprint offers a promising pathway toward sustainable growth, job creation, and economic freedom.
September 2025
The South African International Liquidity Position, measured by Net Gold and Foreign Exchange Reserves, showed growth in both USD and Rand terms for September 2025.
August 2025
In August 2025, credit demand grew by 5.9%, slightly below the anticipated market prediction of 6.0% for the month. Since the initiation of interest rate cuts in September 2024, there has been a noticeable acceleration in overall credit growth, with most subcategories showing increases, particularly in July.
August 2025
International trade measures South Africa’s demand for foreign goods and services relative to its demand for domestically produced products in the global market.
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