South Africa's Absa Purchasing Managers' Index (PMI) increased to 50.7 in September 2026, marking a 4.9-point rise from 45.8 in August. This growth moved the index above the neutral 50-point mark for the first time in four months. The Bureau for Economic Research (BER) released the seasonally adjusted September results on October 1, 2026.
The improvement in the Absa PMI was driven by new sales orders, which increased to 50.8 from 40.3 in August. Business activity also rose to 49.3 from 40.2, recovering much of August's decline but remaining below the neutral level. However, the employment index moved in the opposite direction, falling to 43.1 from 46.2. This decline almost reversed the August improvement, indicating that manufacturers' cautious approach to hiring persists.
The BER noted that delivery bottlenecks complicated the overall result, with respondents reporting longer shipping times, delays in clearing containers at Durban harbour, and higher freight costs. The supplier-deliveries index was 58.4, compared with 58.6 in August. Logistics disruptions were an important driver in September, and the elevated reading helped raise the headline PMI without necessarily reflecting stronger demand.
The purchasing-price index increased by 3.9 points to 71.1, as firms reported higher transport, logistics, and other input costs. September's domestic fuel-price increases added to the pressure, according to the report. This rise in input costs may impact manufacturers' profitability and pricing strategies.
Inventories rose to 52.2 from 43.6, suggesting that some businesses may be rebuilding stocks or preparing for seasonal demand. However, subdued order backlogs meant this did not yet establish a broad rise in demand. The index measuring expected business conditions in six months edged up by 0.6 points to 55.3, indicating a cautiously optimistic outlook.
The BER stated that a sustained run above 50 in the headline PMI would provide firmer evidence of a manufacturing recovery. The Absa PMI's improvement in September is a positive sign, but the sector still faces challenges, including logistics disruptions and cautious hiring practices.
The Absa PMI's rise to 50.7 in September 2026 is a welcome development for South Africa's manufacturing sector. However, the decline in employment and ongoing logistics challenges highlight the need for sustained growth and investment in the sector. The BER's survey provides valuable insights into the sector's performance and future prospects.
Key points
- The Absa PMI rose to 50.7 in September 2026, driven by improved new orders.
- Employment in the manufacturing sector weakened, with the employment index falling to 43.1.
- Logistics disruptions and higher input costs complicated the overall result, with the supplier-deliveries index at 58.4.
