South Africa’s manufacturing sector slipped back into contractionary territory in October, with the seasonally adjusted Absa Purchasing Managers’ Index (PMI), published on November 3, falling to 49.2 points from 50.8 in September.

The decline of 1.6 points follows a brief period of expansion in September and highlights ongoing pressure on domestic and export demand.

According to Absa, manufacturing activity was affected by weaker local demand and sluggish export performance. PMI respondents reported that domestic orders were quieter than usual for this time of year, while global demand remained subdued, with exports contracting for the seventh consecutive month. Additional strain came from logistical challenges and the recent rise in US trade tariffs.

The business activity index declined by five points to 49.4 in October, marking the ninth month of contraction out of ten this year. Although the October figure was the second-highest reading this year after September’s 54.4 points, the earlier recovery in demand has since reversed.

New sales orders fell by 3.9 points to 48.9, following a strong 5.4-point gain in September. Sales orders have now contracted in eight of the ten months this year, indicating that broader economic conditions remain under pressure. The supplier deliveries index also dropped by 1.4 points to 53.5 in October.

Absa noted that it was unclear whether this reflected faster delivery times owing to lower order volumes or recent improvements in port operations in KwaZulu-Natal.

The employment index improved modestly, rising by 2.2 points to 45.1 in October after a sharp 4.9-point decline in September. However, Absa said the index had remained in contractionary territory since April last year. The bank noted that ongoing weak demand and volatile activity levels have made manufacturers hesitant to expand their workforce.

Meanwhile, the purchasing price index edged up slightly by 0.2 points to 61.9 in October, despite a stronger rand.

Fuel price movements were mixed during the month, with petrol prices increasing marginally while diesel prices decreased.

Looking ahead, manufacturers’ expectations for future business conditions weakened further. The index tracking expected business conditions in six months’ time declined from 49.2 in September to 46.1 in October – the lowest level since April’s 48.6 points – suggesting growing pessimism about the near-term outlook for the sector.