South Africa's Manufacturing Industry's Sluggish Start to 2025

South Africa's manufacturing sector experienced a decline in production at the start of 2025, with January's output falling by 3.3% compared to the same month in 2024, according to the latest data from Statistics South Africa (Stats SA). Despite the industry’s sales reaching R3.42 trillion in 2024, several key manufacturing divisions recorded significant contractions in January, impacting the overall sector.

The petroleum, chemical products, rubber, and plastic products division recorded one of the steepest declines, falling by 9.1% and contributing -2.1 percentage points to the overall drop. The food and beverages sector also struggled, contracting by 3.2%, while motor vehicles, parts, and accessories saw a sharp decrease of 10.1%, with both sectors contributing -0.8 percentage points each to the decline.

Despite the broader downturn, the wood, paper, publishing, and printing division provided some relief, registering a 5.6% increase and contributing 0.6 percentage points to overall manufacturing output.

On a month-to-month basis, seasonally adjusted manufacturing production showed a slight recovery, rising by 0.2% in January 2025 compared to December 2024. This followed contractions of 2.2% in December and 1.2% in November. However, over the three months ending in January, output was down by 1.8%, with eight out of ten manufacturing divisions reporting negative growth.

Manufacturing sales also reflected the sector's struggles. Seasonally adjusted sales dropped by 0.8% in January 2025 compared to December 2024, reversing the 1.1% increase seen in December. Over the three-month period ending in January, sales declined by 0.9%, with the largest negative contributions coming from the basic iron and steel, non-ferrous metal products, and machinery division (-3.3%) and the motor vehicles, parts, and accessories division (-3.1%).

Despite these declines across various manufacturing divisions, it must be noted that the industry is historically categorised by contractions in January every new year. Therefore, cause for concern would be premature as industry sales increased from 2021 to 2024.

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