The seasonally adjusted Absa PMI declined by 1.9 points to 46.2 in December, remaining in contractionary territory. This places the 2024 Q4 average PMI at 49 points, only slightly below 2024 Q3 (49.8 points) but above Q1 (47.8) and Q2 (48.1).
While the manufacturing sector experienced a volatile year, December’s second consecutive monthly decline reversed the upward momentum seen in September and October.
Key highlights from the December 2024 PMI include:
- Decline in Business Activity: The business activity index fell sharply by 8.7 points to 40.3 in December, reflecting a significant pullback in production due to weaker demand.
- New Sales Orders Drop: The new sales orders index declined to 37.4 points from 45.9 in November. Some respondents noted December conditions were worse than typically experienced during this period. Export sales also fell back to levels last seen in the first half of 2024.
- Mixed Supplier Delivery Trends: The supplier deliveries index rose by 7.7 points to 56, moving above 50 for the first time in three months. However, the increase is attributed to ongoing logistical issues both locally and globally, rather than increased demand for supplies.
- Employment Index Still Weak: The employment index declined marginally by 0.4 points to 46.5, remaining in contractionary territory for the ninth consecutive month. The index has stayed below the neutral 50-point mark for 11 of the 12 months of 2024.
- Cost Pressures Moderate: The purchasing price index dropped by 1.3 points to 60.4 in December, despite a weaker rand and increased fuel prices at the beginning of the month.
- Business Optimism Improves: The index measuring expected business conditions in six months increased by 5.2 points to 67.6, showing manufacturers’ growing optimism about future conditions.
The December PMI results underscore the challenges facing South Africa’s manufacturing sector, including weak domestic demand, declining export sales, and logistical disruptions. However, the improvement in future expectations suggests manufacturers remain hopeful for a recovery in 2025.