By Thanda Sithole
Manufacturing output (not seasonally adjusted) declined sharply by 6.3% y/y in April, following a revised 1.2% contraction (previously -0.8%) in March. Seasonally adjusted output rose by 1.9% m/m, though this fell short of fully reversing the 2.5% monthly decline recorded in March. Nonetheless, this marks a moderately better start to 2Q25, although the persistent annual decline underscores ongoing unfavourable operating conditions and is consistent with our assessment of downside risks to the near-term economic growth outlook.
Outlook
Broad-based weakness in manufacturing activity has persisted through the first four months of the year, with output down by 3.4% compared to the same period last year. The largest year-to-date declines have been recorded in electrical machinery, followed by the automotive sector, petroleum-related products, textiles, and the food and beverages division.
Operating conditions for domestic manufacturers remain unfavourable, as reflected in the continued decline in the manufacturing PMI. While the manufacturing PMI expected business conditions index improved to 62.5 points in May from 48.6 in April, indicating better near-term sentiment, conditions remain fluid amid ongoing macroeconomic and policy uncertainty. Domestic demand, particularly private sector fixed investment, remains weak, and external economic conditions are not conducive to growth in manufacturing merchandise exports.
Selected sector analysis
The decline in manufacturing output in April was driven by contractions in nine out of ten manufacturing divisions. A closer look at the major divisions reveals that:
