By Thanda Sithole
Manufacturing output declines in December, dragging on 4Q25 GDP growth
Manufacturing output (not seasonally adjusted) declined by 1.4% y/y in December 2025, following a 2.0% decline in November, which was revised down from a previously reported 1.0% decline. Seasonally-adjusted manufacturing output fell by 2.1% m/m, worse than the 0.7% decline recorded in November. As a result, manufacturing output declined by 0.5% in 4Q25, underscoring a drag on GDP growth in the final quarter of 2025.
Outlook
In 2025, total manufacturing output contracted further, declining by -1.3% y/y, compared to -0.4% in 2024. This reflected a broad-based downturn across most manufacturing divisions, except for textiles, clothing, leather and footwear, which recorded modest growth of 0.6% after declining by 2.9% in 2024 (see Figure 1).
The electrical machinery division experienced the steepest decline (-3.3%) in 2025, followed by the wood and wood products division (-3.1%). The motor vehicles, parts and accessories, and other transport equipment division declined by 2.5%, an improvement relative to the sharp 13.5% contraction in 2024. Within the automotive division, the average annual decline was largely driven by weakness in parts and accessories and other automotive-related products. Meanwhile, motor vehicle production increased by 2.8%, reflecting a recovery from the 10.9% decline recorded in 2024.
We expect a modest rebound in manufacturing production in 2026, supported by continued improvement in domestic demand, easing infrastructure constraints, and a stable global growth environment. The January manufacturing PMI pointed to improved business activity, reinforcing signs of strengthening domestic demand, while the expected business conditions index signalled rising optimism among manufacturers regarding near-term operating conditions. That said, we are likely to continue experiencing some volatility while the operating environment gradually improves.
Selected sector analysis
The decline in manufacturing output in December 2025 was broad-based, with eight out of ten divisions recording decreased activity (see Figure 1). The largest contractions were observed in furniture (-7.9%), wood and wood products (-5.2%), food and beverages (-4.6%), and basic iron and steel (-2.3%).
