South Africa’s manufacturing sector returned to expansion in April, but the improvement may prove fragile.

The Absa Purchasing Managers’ Index (PMI) rose to 52.6 points in April from 49.0 points in March, moving above the neutral 50 mark for the first time since September 2025. The PMI, published by the Bureau for Economic Research at Stellenbosch University and sponsored by Absa, measures activity in South Africa’s manufacturing sector. A reading above 50 points indicates expansion, while a reading below 50 points indicates contraction.

The latest reading points to a marginal improvement in the manufacturing sector at the start of the second quarter of this year. However, part of the rebound may have been driven by firms building inventories ahead of expected price increases, rather than by a sustained recovery in demand.

The main improvement came from activity and orders. The business activity sub-index rose to 52.8 points in April from 46.1 points in March, returning to expansionary territory for a second consecutive month. New sales orders also recovered sharply, with that sub-index rising to 52.9 points from 44.5 points. The recovery was driven mainly by domestic demand, while export sales declined, suggesting that the improvement was not broad based.

Inventories also moved above 50 points for the first time since August 2025, rising to 52.3 points from 48.8 points. This supports the view that manufacturers were building stock before further cost increases arrived, rather than responding only to a durable rise in demand.

The main warning came from prices. The purchasing price index jumped to 85.6 points in April from 75.8 points in March, marking the highest reading since July 2022. This was driven by higher oil-related input costs and a weaker exchange rate. The result is that manufacturers may face squeezed margins, higher import costs, and weaker demand in the months ahead.

The employment sub-index remained weak, edging up only to 43.8 points from 43.3 points, while the expected business conditions sub-index rose to 47.4 points from 46.0 points, remaining below the 50-point neutral level.

Bheki Mahlobo, economics and policy editor of The Common Sense, said, “The latest reading reflects firms purchasing supplies in bulk ahead of expected price increases, meaning the Absa PMI could come under pressure in May.” He added that the sharp rise in input costs may serve as a leading indicator for higher producer and consumer inflation, as crude oil prices remain high.