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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
August 12, 2025

Manufactuting Production

June 2025

In June 2025, South Africa’s manufacturing output increased by 1.9%, marginally exceeding market expectations of 1.8% for the month. Notably, the Purchasing Managers’ Index (PMI) saw a significant rise from 43.1 in May to 48.5 in June, suggesting an expected rebound in manufacturing activity for the month.

The food and beverages sector was a key driver of this growth, expanding by 6.0% and contributing 1.4 percentage points to the overall increase. Similarly, the petroleum, chemical, rubber, and plastics division grew by 1.9% year-on-year in June, adding a further 0.4 percentage points to the sector’s total output.

Seasonally adjusted retail sales increased by 2.4% month-on-month in June. For the second quarter ending in June, sales grew by 1.2% quarter-on-quarter. The largest contributor to this growth was the food and beverages division, which expanded by 3.3%, adding 0.8 percentage points. The motor vehicles, parts, and accessories division also saw a notable increase of 5.5%, contributing another 0.8 percentage points to quarterly growth.

Manufacturing remains a vital component of South Africa’s economy, employing approximately 1.6 million people and accounting for 12.5% of GDP in 2024. Employment figures rose slightly from 1.675 million in Q4 2024 to 1.677 million in Q1 2025, indicating a cautiously optimistic outlook supported by June’s production growth.

Despite these positive signs, business owners remain cautious, adopting a wait-and-see approach amid concerns over US tariffs on exports and ongoing US-China trade tensions. This caution is expected to intensify with the recent introduction of a 30% tariff on South African products entering the US market, effective from August 7, 2025. Nonetheless, companies continue to maintain substantial cash reserves, reflecting a prudent approach amidst current domestic and global economic uncertainties in the short to medium term.

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