South Africa's Absa PMI Rebounds Sharply to 48.7 in January, Recovering from Six-Year Low
JOHANNESBURG, 2 February 2026. South Africa's manufacturing sector showed a marked recovery at the start of 2026, with the seasonally adjusted Absa Purchasing Managers' Index rising 8.2 points to 48.7 in January, up from December's 40.5 reading, the weakest in six years. The January figure...
South Africa's Absa PMI Rebounds Sharply to 48.7 in January, Recovering from Six-Year Low
JOHANNESBURG, 2 February 2026. South Africa's manufacturing sector showed a marked recovery at the start of 2026, with the seasonally adjusted Absa Purchasing Managers' Index rising 8.2 points to 48.7 in January, up from December's 40.5 reading, the weakest in six years. The January figure remained fractionally below the 50-point threshold that separates expansion from contraction, but signalled a significant stabilisation after the steepest factory-sector decline since the early months of the COVID-19 pandemic.
The business activity sub-index edged back above the neutral 50-point level in January, suggesting that production growth may have restarted in the first quarter after months of contraction. The improvement was broad-based across several components, reflecting the correction of the unusually sharp deterioration recorded in December 2025, which economists had attributed in part to pre-holiday inventory drawdowns and one-off demand weakness rather than a structural shift.
Analysts noted that the January PMI bounce was consistent with broader signals of improving confidence in the South African private sector. Business confidence data released at the end of 2025 had already shown a sharp 18.1-point gain, reaching the highest level since September 2024, suggesting that firms entering 2026 were in a more optimistic posture than the December PMI suggested.
However, economists cautioned against over-reading the January number. Manufacturing employment remained under pressure, with the employment sub-index having been in contractionary territory since April 2024. Weak domestic demand and structural constraints, including high input costs, logistics challenges at ports, and global trade uncertainties introduced by United States tariff announcements, continued to weigh on the sector's medium-term trajectory.
The stronger-than-expected January print nonetheless provided modest grounds for optimism ahead of the 2026 national budget, scheduled for presentation in late February, in which Finance Minister Enoch Godongwana was expected to outline the fiscal path for the coming year.
The Absa PMI is produced monthly in partnership with the Bureau for Economic Research and is based on surveys of senior purchasing and supply executives across South Africa's manufacturing sector.