South African factory mood hits worst level in six years

Absa's PMI fell to 40.5 in December from 42 in November, marking a near six-year low, while inventories and the employment gauge both declined amid weak domestic demand.

South African manufacturers' sentiment weakened in December and moved further into contraction. Absa Group Ltd.'s Purchasing Managers' Index, compiled by the Bureau for Economic Research, fell to 40.5 from 42 in November. Inventories and employment measures also deteriorated as domestic demand remained weak. The reading is reported as a near six-year low for the sector. Key details: - Absa's PMI fell to 40.5 in December from 42 in November, according to the lender's statement. - The inventories sub-index dropped 9.9 points to 36.1, its lowest level since May 2020. - The employment gauge declined 6.3 points and has been in contractionary territory since April 2024. - South Africa's broader economic context includes a reported unemployment rate of 31.9 percent and forecasts that the economy may expand about 1.6 percent in 2026. Summary: The data point to weak domestic demand and continued pressure on hiring in the manufacturing sector. Undetermined at this time.