FX.co ★ South Africa Factory Activity Downturn Deepens: Absa

South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined to 45.8 in August 2026 from 46.8 in July, marking a third consecutive month of contraction in factory activity and the sharpest downturn since last December. Business activity dropped to 40.2, its lowest reading this year, while new orders fell to 40.3, reversing the gains recorded in July. The deterioration was driven mainly by domestic factors, with manufacturers reporting weak demand, fragile consumer confidence and reduced spending on non-essential goods, even as export sales showed some improvement. Labour market conditions remained strained, though the pace of factory job losses moderated. In contrast, the index for business expectations over the next six months rose to 54.7 from 49.3, moving back above the neutral 50 threshold and indicating growing confidence that the current slump may prove temporary. Absa nonetheless cautioned that subdued orders and output will keep near-term operating conditions difficult.