Johannesburg, Jan 9 – South Africa’s manufacturing sector deteriorated further in December, with factory activity falling to its weakest level of the year as demand softened and firms cut back on hiring and stock levels.
The Absa Purchasing Managers’ Index slipped to 40.5 in December from 42.0 in November, remaining firmly below the 50 threshold that separates expansion from contraction. The reading capped a year in which manufacturing sentiment spent most months in negative territory.
Employment conditions worsened, with the jobs sub-index dropping by 6.3 points and staying below the neutral level since April 2024. Absa said weak business activity, volatile sales orders, and shortages of specialised skills in certain industries continued to limit hiring.
Inventory accumulation also slowed sharply. The inventories sub-index fell by 9.9 points to 36.1, its lowest level since May 2020, signalling cautious production planning and subdued demand.
External headwinds have compounded domestic challenges. In August last year, the United States imposed a 30% tariff on South African exports, the highest applied to any Sub-Saharan African country. The move has raised concerns over potential job losses in sectors such as agriculture and automotive manufacturing.
Absa said a sustained recovery in economic growth would be required to stabilise employment and lift manufacturing sentiment after a difficult year for the sector.
