The November PMI results highlight the ongoing fragility in South Africa’s manufacturing sector.
A steep deterioration in demand and production overshadowed slight gains in employment and business expectations.
Lower cost pressures are a positive, but alone are not sufficient to lift momentum in the absence of demand recovery.
The seasonally adjusted PMI declined by 7.2 points to 42.0 in November, marking the largest monthly drop in 2025.
The decline was broad-based, with four out of the five headline sub-indices deteriorating.
Only the employment index showed a marginal improvement, though it remained below the neutral 50-point level.
Notably, the PMI reflects real activity movements and not sentiment-based expectations, underscoring the severity of the decline.
Key highlights from the October 2025 PMI include:
- Business Activity Contracts Sharply: The business activity index fell by 12.7 points to 36.7, a steep decline following drops in October (49.4) and marking the lowest level since the onset of 2025. This reflects a renewed and rapid weakening in domestic production, with official manufacturing data showing year-to-date output down 1.5%.
- New Sales Orders Collapse: New sales orders plunged by 13.3 points to 35.6, reflecting both sluggish exports (which have been weak since late 2024) and renewed weakness in domestic demand. Some firms referenced a post-Q3 slowdown following a short-lived recovery, suggesting momentum in orders has failed to carry into the final quarter.
- Supplier Deliveries Improve – But Not for Good Reasons: The supplier deliveries index dropped by 8.0 points to 45.5, suggesting faster delivery times. While this could reflect marginal improvements in port operations, disruptions in Cape Town due to strong winds and a steep drop in new orders suggest that suppliers are simply less busy, which negatively contributes to the headline PMI.
- Employment Ticks Up Slightly: The employment index rose for a second consecutive month, increasing by 1.1 points to 46.2. While still below the neutral mark, this is higher than the average for the first 10 months of the year – a mild positive amidst broader sectoral weakness.
- Inventories Continue to Dwindle: The inventories index declined to 46.0, its lowest level since May. This points to lower raw material and intermediate stockpiles, either due to constrained cash flows or muted confidence in forward demand.
- Cost Pressures Intensify: The purchasing price index declined by 7.4 points to 54.5, the lowest level since early 2022. A stronger rand and lower global oil prices contributed to easing cost pressures, though diesel prices remained sticky. If sustained, these trends could help reduce broader inflationary pressure over time
- Outlook Marginally Brightens: After two months below 50, the index tracking expected business conditions in six months’ time rose to 50.8, offering some optimism for a gradual recovery. However, this is still well below the long-term average, and confidence remains tentative.