Manufacturing slumps as electricity costs and weak demand bite, Stats SA shows

South Africa’s manufacturing sector lost momentum in November 2025, with production contracting year-on-year and month-on-month as structural pressures and weakening demand weighed heavily on key industries, according to data released by Statistics South Africa (Stats SA) on Thursday.

Manufacturing production declined by 1.0% in November compared with the same month in 2024, while seasonally adjusted output fell by 1.1% compared with October.

The month-on-month decline followed a 1.0% increase in October and a 0.3% rise in September, signalling a sharp reversal in recent gains.

Stats SA said the largest negative contributions to annual production came from the wood and wood products, paper, publishing and printing division, which contracted by 7.9%.

This was followed by basic iron and steel, non-ferrous metal products, metal products and machinery, which fell by 2.5%, while motor vehicles, parts and accessories and other transport equipment declined by 4.4%.

Offsetting some of the weakness was the petroleum, chemical products, rubber and plastic products division, which recorded growth of 5.5%, making it the strongest-performing sector in November.

On a quarterly basis, however, manufacturing showed modest improvement.

Seasonally adjusted production increased by 0.6% in the three months ended November compared with the previous three months, with six of the 10 manufacturing divisions recording positive growth.

The largest positive contributions over this period came from petroleum, chemical products, rubber and plastic products, basic iron and steel, non-ferrous metal products, metal products and machinery, and furniture and ‘other’ manufacturing, which surged by 7.5%.

Manufacturing sales data painted a slightly more encouraging picture.

Stats SA reported that seasonally adjusted manufacturing sales increased by 0.2% in November compared with October, following a decline of 0.8% in October and a 0.4% increase in September.

Independent economist Ulrich Joubert said the headline contraction masked deep-seated challenges in specific sub-sectors.

“We've seen some negative figures for, I think, the last four months on that. I'm not quite sure why that is. We saw some strong performance of this sector last year this time, over these four months,” he said.

Joubert added that the ongoing decline in basic iron and steel production was more clearly linked to structural problems.

“We know that there are problems within the steel manufacturing industry, if you look at what's happening at ArcelorMittal South Africa (Amsa). And it's not only Amsa. I think that is mostly because of, first of all, the price of electricity,” he said.

“Not first of all, but the price of electricity is a major problem. But also the import of subsidised and cheap iron products.  We just can't compete.  We don't have the volumes to compete against those imports.”

According to Joubert, high electricity prices remain a major constraint, alongside the influx of cheap, subsidised steel imports.

“We sit with specific problems in the manufacturing industry. The smelters are closing down because of the cost of electricity. So we sit with the problem. The problem of the cost base in South Africa and also, you know, labour is a problem. The infrastructure could be a problem.”

Diyanna Slabbert, an econometrician at Investec, said the 1.0% year-on-year contraction in November followed revised growth of 0.4% in October and was consistent with other indicators of weakening activity.

Slabbert said this is in line with the seasonally adjusted headline Purchasing Managers’ Index, which fell further into contractionary territory in November to 42 points from 49.2 in October, driven by a slump in new orders and business activity.

BUSINESS REPORT