Manufacturing sentiment in South Africa weakened further in December, falling to its lowest level of 2025 as sharp declines in inventories and employment weighed heavily on the sector, according to a purchasing managers’ index (PMI) survey released on Thursday and reported by Reuters.
The seasonally adjusted PMI sponsored by South African bank Absa slipped to 40.5 points in December from 42.0 in November, capping a year dominated by contractionary readings. A PMI figure below 50 indicates a contraction in activity, while a reading above 50 signals growth.
Absa said the employment sub-index fell by 6.3 points in December, pushing it deeper below the neutral 50-point threshold. Employment conditions have now remained in contractionary territory since April 2024.
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“The weak performance in business activity and volatile sales orders continues to limit the scope for hiring, while shortages of specialised skills in certain niche industries also weigh on employment outcomes,” Absa said in a statement accompanying the survey results.
The inventories sub-index recorded an even steeper decline, dropping by 9.9 points to 36.1 in December, its lowest level since May 2020. The pressure on the sector comes amid broader economic challenges, including a decision by U.S. President Donald Trump to impose a 30% tariff on South African exports to the United States in August last year.
The tariff, the highest applied to any country in sub-Saharan Africa, could lead to tens of thousands of job losses in industries such as agriculture and vehicle manufacturing.
Absa said that only a strong economic recovery and sustained growth would improve employment conditions in the manufacturing sector.
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