The recent decline in South Africa's manufacturing PMI illustrates the tough conditions currently facing the sector. With the index dropping to 46.2 in December, manufacturers are grappling with internal and external challenges that hinder growth. This setback emphasizes the need for strategic responses to boost activity levels and drive economic recovery.
Manufacturers in South Africa are dealing with weak domestic demand and declining export sales, contributing to the persistent contraction reflected in the PMI. The significant drop in new sales orders indicates a worrying trend, as businesses struggle to secure contracts and fulfill production targets. Logistical disruptions further exacerbate these issues, highlighting the necessity for improved infrastructure and management practices within the sector.
Despite the challenges recorded in December, the outlook for 2025 remains cautiously optimistic as manufacturers express hope for recovery. Improvements in energy stability and potential growth in demand could provide a much-needed boost to the manufacturing sector. Industry experts and business owners anticipate a gradual recovery if logistical issues are addressed and economic conditions improve.
South Africa's manufacturing activity remains under pressure as the seasonally adjusted Absa Purchasing Managers' Index (PMI) dropped by 1.9 points to 46.2 in December, indicating continued contraction in the sector. This marks the fourth quarter average of the PMI at 49 points, slightly below the previous quarter's performance. The decline reflects a volatile year for manufacturing, reversing the upward momentum seen in September and October. The business activity index noted a sharp decrease of 8.7 points, attributed to falling demand. New sales orders plunged significantly as the index fell to 37.4 points from 49.9 in November, highlighting the struggles faced by manufacturers. Respondents of the PMI survey expressed concerns that conditions in December were notably worse than what is typically expected in the month. The purchasing price index also saw a decline, falling by 1.3 points. The results from December underscore the ongoing challenges confronting South Africa's manufacturing sector, including weak domestic demand, declining export sales, and logistical disruptions. Despite the current challenges, the Improvement in future expectations suggests that manufacturers retain a measure of optimism for a recovery in 2025. In an interview, Andisa from Absa Corporate Investment Banking noted that while respondents indicated December was particularly tough, some factors might be contributing to the low PMI figures. Low growth has been a significant issue, coupled with a contraction in GDP observed in the third quarter of the previous year, leading to weaker demand domestically and globally. The relatively stable energy supply since March has yet to translate into improvements within the manufacturing sector. Experts believe that logistical issues may also be hampering progress, which impacts business activity. Though there was a noticeable fall in critical indices like business activity, new sales orders, and purchasing prices, the overall optimism among manufacturers for 2025 remains a positive signal for the sector's future recovery. As the sector anticipates improvements in electricity supply and a boost in production, there is cautious hope for revitalization in the upcoming year.It is long gone.The little bit that is left is slowly disappearing. The ANC will bring it back with tenders😂😂😂😂
Can you believe it.....a country that is declining in manufacturing sector 😢 this is sad.
The topic or issue here is about Manufacturing,which is in a sharp decline, and the person who gets called to divulge this topic? Guess who? A consumer. This tells alot about the downward trajectory and its continuity. Programs like these are meant for you to raise hope where there is hopelessness, you go and bring in a person that doesnt even know how a Toothpick is made, to talk on behalf of manufacturers ? like really?
