South African factory activity slumps further in December, Absa PMI shows

JOHANNESBURG, Jan 8 (Reuters) - ⁠South African ⁠manufacturing ‍sentiment fell in December to its lowest level for 2025, driven by steep declines in ‍inventories and employment sub-indices, a purchasing managers' ​index (PMI) survey showed on Thursday.

The seasonally-adjusted PMI sponsored by South African ​bank Absa fell to 40.5 points in December from 42.0 in November, concluding a year marked by predominantly contractionary readings ​in negative territory.

A reading below 50 indicates a contraction in activity, while above 50 signals growth.

The ​sub-index tracking employment decreased by 6.3 points in December, falling further below ‌the neutral 50-point mark and remaining in contractionary territory since April 2024, Absa said in ​a statement accompanying the survey's ⁠results.

"The weak performance in business activity and volatile sales orders continues to limit the ‌scope for hiring, while shortages of specialised skills in certain niche industries also weigh on employment outcomes," said ‌Absa.

The inventories sub-index declined by 9.9 points to 36.1 in December, ‌the lowest since May 2020.

U.S. President Donald Trump imposed a 30% tariff on South African exports to the U.S. in ‍August last year, the highest rate in Sub-Saharan Africa, a move that could cause ⁠tens of thousands of job losses in sectors like agriculture and carmaking.

ABSA said only strong economic growth and recovery will lead to better employment outcomes.

(Reporting by Anathi Madubela;Editing by Olivia Kumwenda-Mtambo)

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