S. Africa’s manufacturing contracts again in Dec ’24

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell to 46.2 points in December 2024, a 1.9-point decline that kept the manufacturing sector in contractionary territory.

The fourth-quarter average stood at 49 points, slightly below 49.8 in the third quarter but above the first quarter (47.8) and the second quarter (48.1), reflecting a volatile year for the sector.

The decline was driven by sharp falls in key metrics. Business activity plunged 8.7 points to 40.3, while new sales orders dropped to 37.4 from 45.9 in November, with some respondents describing December conditions as unusually poor. Export sales also weakened, reverting to levels last seen in early 2024.

Supplier deliveries improved to 56 points, the first above-50 reading in three months, but delays were attributed to persistent logistical challenges rather than stronger demand. The employment index slipped slightly to 46.5, remaining below the neutral 50-point mark for the ninth consecutive month.

Despite a weaker rand and rising fuel prices, the purchasing price index fell to 60.4. However, manufacturers showed optimism for the future, with the index for expected business conditions in six months rising 5.2 points to 67.6, signaling confidence heading into 2025.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser