By Nilutpal Timsina.
South Africa’s manufacturing sentiment deteriorated further in August as business activity slumped, a purchasing managers’ index (PMI) survey showed on Tuesday, signalling a weak start to the second half of the year.
The seasonally adjusted PMI sponsored by South African bank Absa fell to 45.8 in August from 46.8 in July, its fourth consecutive monthly decline and the lowest reading so far in 2026.
A reading below 50 indicates a deterioration in overall business conditions for manufacturers.
The business activity index dropped sharply to 40.2 from 48.8, its lowest level this year, while the new sales orders index fell to 40.3 from 44.1, giving up the gains recorded in July.
Absa said the deterioration in demand was largely domestic, as export sales showed some improvement while respondents reported subdued demand, weak consumer confidence and soft spending on non-essential goods.
The sub-index tracking employment rose to 46.2 from 42.2, indicating that factory employment continued to decline, but at a slower pace than previously.
Despite the current weakness, manufacturers were more optimistic about the future, with the index measuring expected business conditions in six months rising to 54.7 from 49.3, moving back above the neutral 50 level.
“This provides some hope that manufacturers view the current weakness as temporary, although the combination of subdued orders and sharply weaker production suggests that near-term conditions remain challenging,” Absa said.
© 2026 Reuters.