Manufacturing in dire straits as production plummets 6. 3% year-on-year
The manufacturing sector's poor performance aligns with the Absa Purchasing Managers' Index, which moved further into contractionary territory in April
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South Africa's manufacturing production nosedived 6.3% year-on-year in April 2025, worse than economists had expected, although in line with a global slowdown in the production side of most economies.
Statistics South Africa released data that showed that food and beverages were hardest hit as a subsector, declining 7.6% and slicing off 1.8 percentage points from the headline figure. This follows an already unfavourable performance in the first quarter, where manufacturing dragged down gross domestic product.
Manufacturing was, at one point, considered the backbone of the country's industrialisation efforts and a critical employer of semi-skilled workers. The sector, which accounts for about 14% of GDP, employs about 1.6 million South Africans.
Basic iron and steel, non-ferrous metal products, metal products and machinery's decline resulted in a negative contribution of 1.4 percentage points, while the motor vehicles, parts and accessories and other transport equipment sector slumped a staggering 13%, removing another 1.2 percentage points.
The petroleum, chemical products, rubber and plastic products division also contracted by 4.7%, further dragging down the overall figure by an additional percentage point.
While there was a slight month-on-month increase of 1.9% in April compared to March, the three-month trend shows a 1.4% decrease, with seven out of ten manufacturing divisions reporting negative growth.
Investec economist Lara Hodes described the decline as "notable" and worse than a Bloomberg consensus expectation of a 4.5% year-on-year drop. "The decline was broad based, with all sectors except the glass and non-metallic mineral products grouping declining year-on-year," she said.
She highlighted that within the food and beverages segment, the beverages and other foods sub-categories were largely responsible for the notable decline.
The manufacturing sector's poor performance aligns with the Absa Purchasing Managers' Index, which moved further into contractionary territory in April, said Hodes. Citing the Bureau for Economic Research, Hodes added that 'the index tracking export sales returned to contractionary levels'.
Thanda Sithole, FNB senior economist, said 'Operating conditions for domestic manufacturers remain unfavourable'.
Statistics South Africa's figures show a picture similar to that of the rest of the world, with Hodes noting that "manufacturing operating conditions globally deteriorated for the first time in four months in April," citing the JP Morgan Global Manufacturing PMI survey. New orders decreased, trade conditions worsened, jobs were cut, and business optimism slumped, JP Morgan found.
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