South Africa’s factories showed signs of renewed life in September, but the outlook remains fragile.

This was according to the Absa Purchasing Managers’ Index (PMI), which climbed to 52.2 points from 49.5 points in August. A reading above 50 signals expansion in manufacturing activity, while a reading below 50 signals contraction. The quarterly average for the third quarter reached 50.8 points, a marked improvement on the contraction seen in the first half of 2025.

The PMI is made up of a number of sub-indexes – data from these was somewhat mixed.

The rebound in the overall PMI was driven by a significant increase in the business activity sub-index, which soared to 57.9 points, up from 45.8 points in August. This marks the highest level since October 2024. The new sales orders sub-index also experienced a strong rise, reaching 56.1 points and reversing the slump seen in August of 47.3 points. This recovery was primarily supported by domestic demand but exports struggled due to the impact of American tariffs and port inefficiencies.

However, the labour market remains under pressure. The employment sub-index fell sharply to 42.8 points from 48.9 points in August, underscoring manufacturers’ caution amid rising labour costs and inconsistent demand.

Input costs compounded the challenge while business confidence also waned, with expectations for conditions six months ahead slipping below the neutral 50 mark to 49.2 points, down from 56.8 points.

Bheki Mahlobo, Economics and Policy Editor at The Common Sense, said that: “Factories are responding to stronger local orders, but high costs and weak hiring indicate a recovery that is still fragile."