South African Manufacturing PMI Falls to 40.5 in December, Steepest Contraction Since April 2020
JOHANNESBURG, 8 January 2026. South Africa's seasonally adjusted Absa Purchasing Managers' Index fell to 40.5 in December 2025 from 42.0 in November, marking the steepest month-on-month contraction in the manufacturing sector since April 2020, according to data published by Absa Bank on Thursday.
South African Manufacturing PMI Falls to 40.5 in December, Steepest Contraction Since April 2020
JOHANNESBURG, 8 January 2026. South Africa's seasonally adjusted Absa Purchasing Managers' Index fell to 40.5 in December 2025 from 42.0 in November, marking the steepest month-on-month contraction in the manufacturing sector since April 2020, according to data published by Absa Bank on Thursday.
The reading, which fell further below the neutral 50-point threshold, indicated a third consecutive month of declining manufacturing activity. The December result was driven by deterioration across multiple sub-indices, with inventories falling 9.9 points to 36.1, their lowest level since May 2020, and the employment sub-index declining by 6.3 points, extending a contraction in manufacturing employment that has persisted since April 2024.
Absa said weak performance in business activity and volatile sales orders continued to limit the scope for new hiring, while skill shortages exacerbated the employment decline. The business activity and new sales orders sub-indices both remained well below the expansionary threshold.
The PMI data contrasted with improvements in other parts of the South African economy, including the energy sector and, to a degree, logistics. Manufacturing remains structurally constrained by domestic demand weakness, competition from imported goods, elevated input costs, and, in some subsectors, the legacy effects of years of unreliable electricity and transport infrastructure. The sector has registered negative annual growth for two consecutive years.
Separately, S&P Global's December 2025 composite PMI for South Africa fell to 47.7, down from 49.0 in November, reflecting a broader softening in private-sector output.
Economic analysts noted that the December manufacturing contraction, if sustained into the first quarter of 2026, could limit the pace of economic recovery and weigh on employment creation at a time when the unemployment rate stood at 31.9%.
The Absa PMI is compiled by the Bureau for Economic Research from monthly surveys of purchasing managers in South Africa's manufacturing sector. Readings above 50 indicate expansion; readings below 50 indicate contraction.