The seasonally adjusted Absa PMI rose by 4.9 points to 50.7 in September, returning above the neutral 50-point mark after three consecutive months in contractionary territory.
New sales orders moved back into expansion, while business activity recovered most of August’s steep decline.
However, the improvement was not uniform, with employment remaining weak, logistics disruptions continuing to affect manufacturers and input cost pressures reaccelerating during the month.
Key highlights from the September 2026 PMI include:
- New Sales Orders Return to Growth: The new sales orders index rebounded sharply from 40.3 to 50.8, moving back above the neutral 50-point mark. Export sales also improved to their strongest level since early 2025, indicating that the improvement in orders was not solely driven by domestic demand. However, manufacturers continue to report a mixed environment. Some firms are preparing for stronger seasonal demand, while others continue to see weaker customer commitments and few major projects on the horizon. Intense competition from imports and higher input costs are also keeping margins under pressure.
- Business Activity Recovers Most of August’s Decline: The business activity index recovered sharply from 40.2 to 49.3, moving slightly above its July level. Although the index remained just below the neutral 50-point mark, the rebound suggests that factory activity improved considerably following August’s steep deterioration. The recovery in activity, alongside stronger new orders, provides a more encouraging signal as manufacturers enter the final quarter of the year.
- Employment Remains Under Pressure: The employment index declined from 46.2 to 43.1, almost fully reversing the improvement recorded in August. This suggests that the rebound in orders and activity has not yet been strong or sustained enough to alter manufacturers’ cautious approach to hiring. Firms appear to be waiting for clearer evidence of sustained demand before increasing employment.
- Manufacturers Begin Rebuilding Inventories: The inventories index increased sharply from 43.6 to 52.2, moving back above the neutral level. Together with a rise in purchase commitments, this may indicate that some manufacturers are rebuilding stocks following the weakness of recent months or preparing for stronger seasonal demand. However, order backlogs remain subdued, meaning it is too early to interpret the inventory build as evidence of a broad-based improvement in demand.
- Durban Harbour Delays Remain a Significant Bottleneck: The supplier deliveries index remained elevated at 58.4, broadly unchanged from 58.6 in August. Ordinarily, longer supplier delivery times can accompany stronger demand as suppliers struggle to keep pace with orders. In September, however, respondents pointed specifically to logistics disruptions, including delays at Durban harbour, longer shipping schedules and substantially higher freight and transport costs. The elevated reading should therefore not be interpreted as an unambiguously positive demand signal.
- Input Cost Pressures Reaccelerate: The purchasing price index reversed its recent downward trend, rising by 3.9 points to 71.1. Although this remains almost 15 points below its May peak, it signals renewed pressure on manufacturers’ costs. Respondents highlighted higher transport, logistics and other input costs, while the sharp increase in domestic fuel prices at the start of September added directly to the pressure. Higher supplier delivery charges, increases in paper prices and shortages of some plastic inputs were also cited as challenges for manufacturers and their margins.
- Manufacturers Remain Cautiously Positive About the Outlook: The index tracking expected business conditions in six months’ time edged up by 0.6 points to 55.3. While still below its long-term average, the reading remains comfortably above the neutral 50-point mark and suggests purchasing managers continue to expect conditions to improve over the next six months.
The September PMI therefore marks a welcome improvement after a weak winter period, particularly given the significant rebound in new orders and recovery in business activity. However, the underlying picture remains mixed.
Actual business activity is still marginally below the neutral level, employment weakened and order backlogs remain subdued. At the same time, ongoing logistics disruptions and renewed input cost pressures continue to challenge manufacturers.
A sustained PMI reading above 50 over the coming months would provide more convincing evidence that South Africa’s manufacturing sector is moving into a durable recovery rather than experiencing a temporary rebound.