The seasonally adjusted PMI declined by 1.4 points to 49.5 in August, partially reversing the 2.3-point improvement seen in July. This suggests that activity in the sector remained subdued, with both domestic and export demand showing signs of pressure.
That said, it is noteworthy that the average PMI for Q3 to date is 50.2 points (with September data still outstanding), compared to 45.4 in Q2.
Key highlights from the July 2025 PMI include:
- New Sales Orders Reverse Sharply: After a surprising surge in July, new sales orders declined by 8.5 points to 47.4 in August, falling back into contractionary territory. This highlights the fragile nature of the demand recovery. Respondents noted that both domestic and global demand remained weak, with tariffs and knock-on effects from affected clients continuing to hamper export activity.
- Production Remains Constrained: The business activity index declined by 1.3 points to 45.8, marking a tenth consecutive month in contractionary territory. Manufacturers continued to face rising competition from cheaper imports, adding pressure to local production.
- Mixed Signals from Employment: Despite challenging trading conditions, the employment index increased by 5.2 points to 48.9. However, it remains below the neutral 50-point mark – a position it has held for over 18 months. A more sustained improvement in output would be required to support broader hiring.
- Employment Declines Again: The supplier deliveries index dropped by 3.5 points to 53.0, reflecting faster delivery times, likely due to lower order volumes rather than supply-side efficiency gains. Some manufacturers cited ongoing regulatory constraints as contributing to supply chain bottleneck.
- Cost Pressures Easing Slightly: The purchasing price index edged down by 0.8 points to 58.5, offering modest relief on input costs. The rand strengthened, staying below R18/$ throughout the month and reaching R17.40/$ at its peak. Crude oil prices remained largely flat, although petrol users benefitted more than diesel users from local fuel adjustments.
- Outlook Marginally Improved: The index tracking expected business conditions in six months’ time rose slightly to 56.8 in August, from 56.4 in July. This suggests some stability in forward-looking sentiment despite a persistently difficult trading environment.
The August PMI results reflect the continued volatility facing South Africa’s manufacturing sector. A brief improvement in July has not yet translated into sustained gains, with demand and production both showing renewed signs of weakness.