By Thanda Sithole
Seasonally adjusted manufacturing output, which is crucial for quarterly GDP calculations, fell by 2.4% m/m, aligning with the PMI Business Activity Index. This followed a 1.3% m/m decline in November (previously -1.1%). Full 4Q24 data shows manufacturing output contracted by 0.8%, indicating that the sector weighed on overall GDP growth.
Outlook
The manufacturing sector remained under pressure in 2024, constrained by weak domestic demand and a challenging global environment. Output declined by 0.4% for the year, following subdued growth of 0.6% in 2023. The weakness was largely driven by a sharp 13.3% contraction in motor vehicle, parts, and accessories production, in line with sluggish new vehicle sales.
However, with new vehicle sales showing signs of improvement, automotive production is expected to recover modestly, providing some support to overall manufacturing output. Additionally, an anticipated improvement in domestic aggregate demand, coupled with the suspension of load-shedding, should help drive manufacturing recovery in 2025.
Selected sector analysis
The decline in manufacturing output in December was broad-based, with eight out of ten divisions recording contractions. Among the major divisions:
