Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
January 15, 2026

Manufacturing Production

November 2025

In November, South Africa’s manufacturing output experienced a further decline of 1.0%, following a modest increase of 0.4% in October. This downturn was slightly better than market expectations, which had forecasted a decrease of 1.2% for November. The Purchasing Managers’ Index (PMI) also fell by 7.2 points, from 49.2 in October to 42.0 in November 2025, indicating a less favourable business climate anticipated by manufacturers.

The iron and steel sector contracted by 2.5%, which detracted 0.6 percentage points from overall manufacturing growth. Additionally, the wood and wood products industry declined by 7.9%, further reducing growth by 0.8 percentage points. The motor vehicles, parts and accessories, and other transport equipment sector also contracted by 4.4%, contributing an additional 0.4 percentage points to the overall decline in manufacturing output for November. These sectors were among the primary contributors to the industry’s poor performance.

Conversely, seasonally adjusted manufacturing production increased by 0.6% for the three months ending in November 2025 compared to the previous three months ending in August. Out of ten industries, six reported growths, with notable contributions from:

  • Basic iron and steel, non-ferrous metal products, metal products, and machinery, which grew by 2.0%, contributing 0.4 percentage points.
  • Petroleum, chemical products, rubber, and plastic products, which expanded by 2.1%, adding 0.4 percentage points.
  • Furniture and ‘other’ manufacturing, which increased by 7.5%, contributing 0.3 percentage points.

Seasonally adjusted manufacturing sales also rose by 0.1% over the same three-month period compared to the previous rolling quarter, with significant increases in:

  • Basic iron and steel, non-ferrous metal products, metal products, and machinery, which grew by 3.7%, adding 0.7 percentage points.
  • The furniture and ‘other’ manufacturing division, which expanded by 9.5%, contributing 0.4 percentage points.

Manufacturing is a crucial component of South Africa’s economy, employing approximately 1.6 million people and accounting for 12.5% of the GDP in 2024. Employment slightly decreased from 1.672 million in Q2 2025 to 1.610 million in Q3 2025. Nonetheless, GDP figures for the third quarter reflect a 0.3% quarterly increase in the manufacturing sector’s output. Challenges are expected to arise from the third quarter onwards, partly due to US trade tariffs affecting production, sales, and employment.

Despite positive developments in several industries, business owners are exercising caution due to concerns over US tariffs on exports and ongoing US-China trade tensions. This cautious sentiment is likely to be exacerbated by the recent implementation of a 30% tariff on South African goods entering the US market, effective from August 7, 2025. However, companies are maintaining substantial cash reserves, approximately R1.8 trillion, compared to R1.1 trillion in the first quarter of 2025, according to the Reserve Bank. This reflects a prudent approach amid current domestic and global economic uncertainties in the short to medium term.

Back to News

More Coverage

The Fuel Shock Dilemma: Why the SARB’s Inflation Medicine May Hurt a Fragile Economy

For South African businesses and households already managing a tight financial squeeze, the South African Reserve Bank’s (SARB) recent decision to hike the repo rate to 7.0% felt less like economic medicine and more like a handbrake. While central banks traditionally raise interest rates to cool down an overheating economy, South Africa’s current reality is vastly different. Our recent inflation spike isn’t driven by a wild shopping spree, but by global supply shocks and an imported energy crisis. This begs the crucial question: is the SARB using the wrong tool for the job, and at what cost to our fragile economic growth?

The Core Dilemma: Demand vs. Supply and Interest Rates

The case for holding interest rates is strong, as South Africa’s current inflation is being driven by global supply-side pressures like fuel prices, not excessive local spending. Raising rates now would place additional strain on already struggling consumers and businesses without addressing the real cause of inflation. With the Rand strengthening, oil prices stabilising, and diesel costs expected to decline, natural inflation relief is already emerging. Since inflation remains within the SARB’s target range, increasing borrowing costs could unnecessarily slow economic growth and job creation.

A view on Demand in the Economy: Retail Sales performance – March 2026 Data

Amid a turbulent economic backdrop, South Africa’s retail sales surged by an unexpected 2.6% in March 2026, outpacing forecasts and signalling a fragile yet persistent recovery in the consumer market. While interest rate cuts have bolstered household spending, challenges such as rising inflation, potential interest rate hikes, and geopolitical tensions loom large. Despite these hurdles, sectors like “other retailers” and general dealers have notably contributed to this growth spurt, raising questions about the sustainability of this recovery. With business and consumer confidence indices displaying mixed signals, the future of South Africa’s retail strength hinges on international relations, fuel costs, and policy decisions. Explore the dynamics and implications of these developments in our detailed report.

Consumer Inflation Rate – 2026

In an insightful analysis of South Africa’s economic landscape in April 2026, the report delves into the notable 4.0% year-on-year increase in the Consumer Price Index, accentuated by surging costs in housing, utilities, transport, and financial services. Amid rising inflationary pressures fuelled by global uncertainties, including the Middle East conflict and climbing oil prices, the South African Reserve Bank faces critical decisions on interest rates to balance inflation and economic growth. As households grapple with diminished purchasing power, the precarity of reliance on short-term credit looms large, while international factors such as US-imposed tariffs and potential BRICS trade tensions threaten market stability. The report provides a comprehensive look at the delicate dance South Africa must perform to maintain price stability and safeguard the Rand amidst a challenging global backdrop.

The SARB’s High-Stakes Tightrope: Balancing an Inflation Breach Against a Jobless Crisis

Next week’s SARB decision could define South Africa’s economic trajectory: facing an external oil shock and runaway electricity tariffs that threaten to push April inflation past the central bank’s 4.0% ceiling, policymakers must weigh a technical inflation breach against a staggering surge in unemployment and collapsing investment, a choice between credibility and survival. With joblessness spiking and GDP growth stagnant, aggressive rate hikes would risk choking off the private investment the country urgently needs, while inaction could dent the new inflation-targeting framework. Read the full report for a detailed breakdown of the shocks driving this dilemma, the likely “hold” outcome from the May 28 MPC meeting, and what it means for businesses, households, and markets.