By Thanda Sithole
Manufacturing output (not seasonally adjusted) increased by 0.3% in September following declines of 1.1% y/y and 1.5% y/y in July and August, respectively. The outcome exceeded the Bloomberg consensus forecast of a 0.3% decline. Seasonally adjusted manufacturing output, which is critical for calculating quarterly GDP growth, declined by 0.5% m/m after rising by 0.7% in August. As a result, output in 3Q25 rose by only 0.1%, suggesting that the manufacturing sector's contribution to GDP growth in the quarter was negligible.
Outlook
Manufacturing output has declined by 1.5% year-to-date (January to September) compared with the same period last year, following a 0.4% decline in 2024. This reflects continued weak domestic and external demand, as well as uncertainty weighing on confidence. The manufacturing PMI fell to 49.2 index points at the start of 4Q25, with the new sales orders and business activity indices declining to 48.9 and 49.4, respectively. The index tracking expected business conditions also fell sharply to 46.1 from an already depressed level of 49.2, suggesting that surveyed manufacturers have become even more pessimistic about the near-term operating environment. Activity is likely to remain subdued in the short term until demand picks up, and structural constraints are sufficiently addressed. In addition, United States tariffs, for which South Africa has yet to secure a resolution, remain a key concern for export competitiveness.
Selected sector analysis
The monthly annual expansion in manufacturing output in September was driven by increases in four out of ten manufacturing divisions. Zoning into the five major divisions reveals that:
Basic iron and steel, non-ferrous metal products, metal products, and machinery declined by 1.2% y/y, after declining by 5.2% in August. Meanwhile, wood and wood products, paper, publishing, and printing, declined by 5.3% y/y after declining by 6.2% in August.
