South African factory sentiment improved for a second consecutive month in October but remained below the 50-point mark that separates expansion from contraction, according to the Absa Purchasing Managers' Index (PMI) released on Monday.
The seasonally adjusted index rose to 49.6 from a revised 48.7 in September. All five sub-components gained, but Absa called the recovery fragile.
Demand still weak
The business activity index stood at 48.6 and the new sales orders index at 46.8. Absa said both "remain below the neutral 50-point mark, indicating that production and demand conditions remain under pressure". It added that a sustained recovery in demand and production, supported by easing cost pressures, will be important in determining whether the sector can move decisively back into expansion territory.
The gain was marginal because of weak domestic demand and logistics bottlenecks, the survey results indicated.
Expectations slip ahead of the election
The six-month expectations index fell to 51.7 in October from 55.3 in September. The fall was linked to logistics constraints and political uncertainty ahead of the municipal elections on 4 November.
Vehicle sales and markets
The National Association of Automobile Manufacturers of South Africa (naamsa) said new vehicle sales rose 10.4% year on year in October to 61,890 units, despite cost-of-living pressures. The association also reported that sales of new energy vehicles between January and September, at 22,389 units, already exceeded the 16,703 sold in all of 2025.
The rand traded at about 16.64 to the dollar on Monday afternoon, roughly 0.4% stronger than its previous close, while the JSE Top 40 index was up about 1% and the 2035 government bond yield was down 2.5 basis points at 8.565%, according to market reports.
What to watch
The Reserve Bank's next rate decision is on 19 November, and economists are split on whether it will raise rates again. Readers should treat the market levels above as a snapshot of Monday trading; we have not confirmed Tuesday's levels.
