South Africa's Absa PMI Slips Back to 47.4 in February as Factory Activity Returns to Contraction
JOHANNESBURG, 3 March 2026. South Africa's manufacturing sector returned to contraction in February, with the seasonally adjusted Absa Purchasing Managers' Index falling to 47.4 from January's 48.7, marking a fifth consecutive monthly reading below the neutral 50-point threshold and dashing...
South Africa's Absa PMI Slips Back to 47.4 in February as Factory Activity Returns to Contraction
JOHANNESBURG, 3 March 2026. South Africa's manufacturing sector returned to contraction in February, with the seasonally adjusted Absa Purchasing Managers' Index falling to 47.4 from January's 48.7, marking a fifth consecutive monthly reading below the neutral 50-point threshold and dashing hopes that the January recovery represented a sustained turning point.
The business activity sub-index, which had briefly climbed above 50 in January, signalling production growth, dropped back to 45.7 in February, indicating that output contracted during the month. Manufacturers cited persistent challenges including delays at South African ports, localised electricity disruptions despite the overall improvement in grid reliability, and subdued domestic and export demand. The employment sub-index also declined, extending the sector's unbroken run of job losses stretching back to April 2024.
The February reading highlighted the fragility of the manufacturing sector's early-year recovery. January's sharp bounce from December's six-year low of 40.5 had lifted some optimism, but February's reversal suggested that the January improvement reflected a correction of temporary factors, such as end-of-year inventory drawdowns, rather than a structural recovery in demand conditions.
One positive element in the February data was the expected business conditions index, which rose back to 68.8 points from January's 66.4, matching December's level and suggesting that manufacturers retained confidence about the medium-term outlook even as current conditions remained challenging. Economists interpreted this as reflecting expectations that government infrastructure spending commitments, announced in the budget the week before, would eventually translate into increased orders for domestically produced materials and equipment.
South Africa's manufacturing sector has registered two consecutive years of negative production growth through 2024 and 2025, dragging on overall GDP performance. The sector faces structural constraints including high input costs, freight logistics bottlenecks at Transnet-operated ports and rail networks, and competition from imported goods benefiting from favourable global shipping conditions.
The Absa PMI is published on the first Monday of each month by Absa and the Bureau for Economic Research, based on a survey of South African purchasing and supply managers.