South Africa’s seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell by 7.2 index points to 42 in November, with Absa reporting that the decline was driven by deteriorations in four of the five subcomponents of the index, while employment showed a slight improvement but remained below the neutral 50-point level.

Absa said on December 1 that the PMI reflected movements in the underlying indices, which tracked changes in activity and demand, and was not a sentiment measure.

The bank reported a sharp fall in the new sales orders index, noting that export sales remained weak, as they had been since the end of 2024. According to the bank, this indicated that the renewed decline in demand during November was largely the result of domestic economic conditions.

Business activity, which briefly moved above the 50-point mark during the third quarter of this year, fell in October and declined further in November.

Absa said the index had been volatile, but the ongoing weakness was also mirrored in official manufacturing data, which continued to show little momentum. Despite the fall in the activity index, the employment index rose for the second consecutive month. Although still below 50, Absa said it was now above the average recorded in the first ten months of 2025.

Absa also pointed to a notable easing in cost pressures. The purchasing price index declined by 7.4 index points in November. The bank said a stronger rand and lower oil prices likely contributed to the fall, while the relatively high diesel price, which was closely linked to petroleum product prices, may have prevented a larger drop.

Absa said that if this trend continued, lower input costs for manufacturers should, over time, help ease consumer inflation.

The expected business conditions index improved slightly in November. After spending two months below 50, it rose to 50.8. Absa said this implied an expectation of improved business conditions in six months’ time, although it remained well below the long-term average for the index.