The seasonally adjusted PMI declined by 1.8 points to 50.8 in May, from 52.6 in April.
While the headline index remained above the neutral 50-point mark, the underlying survey results point to a deterioration in conditions from April to May.
Manufacturers benefitted from demand being brought forward ahead of anticipated price increases in April, but this effect appears to have faded in May. Some respondents also cautioned that the recent softness in demand could persist in the months ahead.
Key highlights from the April 2026 PMI include:
- Business Activity Gives Back April’s Gains: The business activity index declined by 9.3 points to 43.5 in May, falling back into contractionary territory. The decline suggests that the improvement in production seen at the start of the second quarter was not sustained, with weaker demand likely weighing on output.
- New Sales Orders Retreat: New sales orders dropped by 8.3 points to 44.6, reversing much of April’s improvement. Respondents had warned that demand may have been brought forward ahead of expected price increases, and May’s data suggests this was indeed the case. Encouragingly, export sales improved somewhat relative to the first quarter, although they remain in negative territory.
- Inventories Continue to Rise: The inventories index increased by 3.5 points to 55.8, reaching its highest level since early 2023. As in April, higher inventories provided support to the headline PMI, but the increase likely reflects precautionary stock-building ahead of anticipated price increases rather than confidence in stronger future demand.
- Supplier Deliveries Remain Elevated: The supplier deliveries index was largely unchanged at 61.6, remaining at an elevated level for a second consecutive month. As this index is inverted, higher readings indicate slower deliveries. Given ongoing disruptions to global shipping routes and persistent logistical challenges at South African ports, the current level is more likely to reflect supply-side constraints than stronger demand.
- Employment Continues to Improve: The employment index increased by 4.6 points to 48.4, marking a second consecutive monthly gain. Although still below the neutral 50-point mark, the index is now at its strongest level since mid-2025, suggesting that manufacturers are becoming somewhat more optimistic about labour requirements.
- Cost Pressures Remain Elevated: The purchasing price index eased marginally by 0.8 points to 84.8, halting the steep increases recorded in March and April. Nevertheless, the index remains significantly above levels seen at the start of the year, indicating ongoing cost pressures. While expected diesel price declines may provide some near-term relief, respondents highlighted rising costs across a range of services, including courier charges and supplier surcharges.
- Business Confidence Improves: The index tracking expected business conditions in six months’ time rose from 47.4 to 52.9, moving back above the neutral 50-point mark. This suggests that purchasing managers expect conditions to be more favourable by year-end than they are currently. However, confidence remains below the levels recorded before Middle East tensions intensified earlier this year.
The May PMI results suggest that while manufacturing conditions remain more favourable than in the first quarter, the underlying momentum seen in April has weakened. Activity and demand have softened, while elevated input costs continue to pose challenges for manufacturers. The improvement in business confidence is encouraging, but the sustainability of the recovery will depend on whether demand stabilises in the coming months.