South Africa’s manufacturing output rose 1.1% year-on-year in July, ending a run of three consecutive monthly contractions: a 1.8% decline in June, a 4.6% drop in May and a 3.0% fall in April. On a seasonally adjusted month-on-month basis, output climbed 2.2% in July, a faster pace than June’s 0.8% gain or May’s 1.2% increase. Comparing the three months to July against the preceding three months, output edged up 1.0%, with six of the ten manufacturing divisions tracked by Stats SA recording positive growth.
The rebound was led by food and beverages, up 4.1% year-on-year and contributing 1.0 percentage point to the headline figure, and by petroleum, chemicals, rubber and plastic products, up 3.2% and contributing 0.6 percentage points. Textiles also performed strongly, up 6.2%. On the other side, wood products, paper, publishing and printing fell 7.3%, subtracting 0.7 percentage points, while furniture fell 6.0% and motor vehicles declined 2.9%, showing the recovery was far from uniform across the sector.
Investec economist Lara Hodes said subdued demand and weak consumer confidence continued to weigh on the sector despite July’s improvement, and flagged rising global oil prices as an additional cost pressure heading into the rest of the year. The rebound follows a difficult first half: manufacturing growth was limited to just 0.5% in the first quarter and then contracted 1.8% in the second quarter, a decline that contributed directly to the 0.2% contraction in overall GDP for that period.
There is a notable divergence worth flagging between this official production data and survey-based sentiment over the same period. The Absa Purchasing Managers’ Index fell to 46.8 in July from 47.3 in June, staying below the 50-point threshold that separates expansion from contraction in survey terms, even as Stats SA’s hard output numbers for the same month improved. The PMI’s new sales orders sub-index did recover most of June’s losses, rising to 44.1, but Absa attributed that entirely to stronger domestic demand, noting that export sales fell sharply over the same period. The bank described conditions as highly uneven across manufacturers, a reminder that survey sentiment and actual recorded output do not always move together in the short term, and that July’s improvement in the official figures has not yet translated into a broader improvement in how manufacturers themselves view the months ahead.
That gap matters for how the data should be read going into the third quarter. A single month of stronger output, concentrated in food, beverages, textiles and petrochemicals, is a welcome change after three consecutive declines, but a PMI still below 50 and an export order book described as weak suggest the improvement rests more on domestic demand than on a genuine turn in global or business confidence. Manufacturing remains one of the sectors South Africa is relying on to absorb jobs amid a labour market that Stats SA’s own Quarterly Labour Force Survey has described as under sustained and intensifying pressure, which is part of why a single month’s rebound, however welcome, is unlikely on its own to settle the debate over whether the sector’s broader downturn has genuinely turned a corner.