The Absa Purchasing Managers’ Index (PMI) for June 2025 points to a tentative improvement in manufacturing sentiment.
The seasonally adjusted PMI increased by 5.4 points to 48.5 in June, marking an eighth consecutive month in contractionary territory.
This suggests that, despite ongoing headwinds, demand conditions have improved and cost pressures have eased.
Key highlights from the June 2025 PMI include:
- Business conditions outlook steady: The index tracking expected business conditions in six months’ time was unchanged at 62.5 – maintaining the highest level since end-2024. Confidence was supported by the apparent easing of geopolitical risks and expectations that domestic policy disagreements will be resolved.
- Business activity slips slightly: The business activity index decreased by 1.5 points to 41.9, indicating that production has yet to benefit from stronger orders and remains below the neutral 50-point mark.
- New sales orders recover solidly: New sales orders rose by 7.8 points to 46.1. The rebound was driven by recovering domestic demand, although export volumes remain near the lowest levels seen this year.
- Supplier delivery times lengthen – for better reasons: The supplier deliveries index increased by 6.0 points to 55.1, signalling longer delivery times linked to higher order volumes rather than supply bottlenecks, with respondents noting few material shortages.
- Employment Index jumps sharply: The employment index rose by 9.7 points to 49.7, the highest reading since March 2024. The improvement is encouraging but needs to be sustained before the sector can be said to be adding jobs.
- Cost pressures ease further: The purchasing price index fell by 2.3 points to 58.1. A stronger rand and lower diesel prices at the start of June helped offset the impact of higher Brent crude, extending the downward trend in cost inflation.
The June PMI results suggest that South Africa’s manufacturing sector may be turning a corner, with firmer demand and easing cost pressures laying the groundwork for recovery. However, output remains weak and structural logistical challenges persist.