South Africa’s Factories Face Sharp Slowdown as November Manufacturing Sentiment Drops

Post by : Saif Nasser

South Africa’s manufacturing sector faced a major setback in November, as a key monthly survey showed the sharpest drop in business sentiment this year. The latest purchasing managers’ index (PMI), released on Monday, paints a worrying picture of one of the country’s most important industries.

The seasonally adjusted PMI, sponsored by Absa bank, fell to 42.0 in November from 49.2 in October. Since any reading below 50 signals a decline in activity, the new figure shows that factory conditions weakened clearly and suddenly. For many manufacturers already struggling with slow demand, high costs, and unstable economic conditions, this drop adds more pressure.

Absa noted that the November results highlight the fragility of South Africa’s manufacturing environment. Both demand and production — the core drivers of factory health — continued to fall. This overshadowed small improvements in employment and signs that cost pressures might be easing. In simple terms, factories hired slightly more workers and paid a bit less for some inputs, but these improvements were not enough to lift the overall mood.

Exports, which South Africa relies on heavily, have been weak since late 2024. Global demand shifts, unstable shipping routes, and competition from cheaper foreign products have made it harder for South African businesses to sell their goods abroad. At the same time, domestic demand has also slowed again after a short recovery during the third quarter of 2025. When local consumers and businesses buy less, factories receive fewer orders, which eventually hits production levels.

Despite this gloomy outlook, there was one small sign of hope. A sub-index that tracks expectations for business conditions six months into the future rose to 50.8, showing cautious optimism. Even though this number is slightly above the neutral mark of 50, it still remains below the long-term average. This means manufacturers believe things may improve, but they are not confident enough to expect a strong rebound yet.

South Africa’s manufacturing sector — one of the main engines of the country’s economy — has been under pressure for several years. Challenges such as load-shedding, high operating costs, weak global demand, and infrastructure problems continue to trouble businesses. The November PMI drop serves as another reminder that the path to recovery will be slow and uncertain.

As the country heads into the final month of the year, all eyes are on whether external demand improves and whether the government’s economic measures can help support local industries. For now, manufacturers remain cautious, aware that the next few months will be crucial for stability and future growth.

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