The seasonally adjusted Absa Purchasing Managers’ Index (PMI) increased by 2.7 points to 52.2 points in September 2025 and returned to expansionary territory for the second time in 2025.
Encouragingly, the average PMI for 2025Q3 rose to 50.8 points compared to 45.4 (Q2) and 46.2 (Q1).
The improvement has not been smooth, with volatility in the recovery of demand hampering sustained activity growth. Indeed, the industry continues to face challenges, as export demand remains sluggish and is further complicated by US trade tariffs.
The business activity index increased by 12.1 points to 57.9 in August, moving into expansionary territory for the first time since October 2024 (55.6 points). A strong demand recovery supported activity.
New sales orders increased significantly by 8.8 points to 56.1 in September, following a sharp drop of 8.5 points in August. Prior to July, the last time new sales orders had been in expansionary territory was in October 2024 (54.8).
The domestic market drove the recovery as global demand remained under pressure and is complicated by steep US tariffs, a challenging trading environment, and lingering South African port issues.
The supplier deliveries index increased by 1.8 points to 54.8 in September. The increase (delays in delivery times as the index is inverted) is likely due to the unexpected surge in new orders and slow improvements in the logistical challenges.
The employment index decreased by 6.1 points in September, reaching 42.8, following an unexpected 5.2 points gain in August. Manufacturers have been cautious when making employment decisions, due to extended periods of subdued demand not sufficient to lift production along with rising labour costs.
The purchasing price index increased by 3.3 points, edging up to 61.7 in September, despite the fall in fuel prices at the start of the month and stability in the exchange rate. This input cost pressure was possibly due to rising labour costs, raw material costs, lower-than-expected global demand, and other operational challenges.
Worryingly, the index tracking expected business conditions in six months’ time declined significantly from 56.8 in August to 49.2 in September.