FX.co ★ South Africa Factory Activity Contracts Faster: Absa

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) for South Africa dropped to 43.1 in May 2025 from 44.7 in April, signifying the seventh straight month of contraction in manufacturing activity and marking the steepest decline since April 2020. Absa highlighted various ongoing challenges faced by the sector, such as trade disruptions with neighboring countries, policy uncertainties, tariffs, and persistent logistical issues. Despite showing a slight uptick, the business activity index increased by 3.4 points to 43.4, indicating a modest improvement in demand; however, overall activity remains at historically low levels. The new sales orders index also rose, gaining 2.2 points to reach 38.3. On the downside, the inventories index decreased to 44.7 from 47.8, and the employment index continued its decline, extending its contraction to 14 months. Nonetheless, the index measuring expected business conditions in six months surged by 13.9 points to 62.5, marking its highest level since late 2024.