---
title: "SA’s annual manufacturing output plunges in June, but quarterly green shoots emerge"
description: "South African manufacturing production tanked in June, but overall the sector will be a marginally positive contributor to the gross domestic product for the quarter. Green shoots emerged in July."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "ECONOMIC OUTLOOK"
author: "Ed Stoddard"
author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-08-11-sas-annual-manufacturing-output-plunges-in-june-but-quarterly-green-shoots-emerge/"
published: "2024-08-11T21:44:20"
updated: "2024-08-11T21:44:30"
lang: "en-ZA"
word_count: 352
---

# SA’s annual manufacturing output plunges in June, but quarterly green shoots emerge

> South African manufacturing production tanked in June, but overall the sector will be a marginally positive contributor to the gross domestic product for the quarter. Green shoots emerged in July.

By Ed Stoddard · Published 11 August 2024, 23:44 SAST · Updated 11 August 2024, 23:44 SAST

## Key points
- Political uncertainty and Eskom woes cast a shadow on South Africa's manufacturing sector, but a glimmer of hope emerges as Q2 data hints at a potential escape from recession, with green shoots in Q3 signalling a solid start despite looming global economic concerns.
- Manufacturing output fell by 5.2% year-on-year in June, reflecting political uncertainty before the Government of National Unity (GNU) was established.
- Q2 performance not disastrous with a 0.9% growth in the sector compared to the previous three months, offering hope for a positive contribution to GDP.
- Absa PMI rose to 52.4 in July, indicating a strong start to Q3 for manufacturing, bolstered by reduced political risk and stable electricity supply.
- Concerns linger over global economic downturn impacting demand, but potential for brighter outlook if GNU addresses state failures.

## Content

Manufacturing output fell by 5.2% year on year in June, said Statistics South Africa, underscoring how political uncertainty that month weighed on activity before the Government of National Unity (GNU) was in place.

This followed a 1.2% year-on-year slump in May when political jitters were setting in ahead of the election, a state of affairs which took the shine off Eskom’s stellar performance.

However, a 5.0% annual rise in April means that Q2 will not be a train smash. In the three months to the end of June on a seasonally adjusted basis compared with the previous three months, output in the sector grew by a marginal 0.9% — at least according to the preliminary data, which could be revised.

As things stand, manufacturing will make a marginally positive contribution to the Q2 GDP read, raising hopes that a recession has been averted after the economy shrank by 0.1% in Q1.

It’s still hardly a bed of roses.

![Image](https://www.dailymaverick.co.za/wp-content/uploads/2024/08/Screenshot-2024-08-11-at-16.37.17.png)

“Despite improved operating conditions, demand is just not there,” Jee-A van der Linde, senior economist at Oxford Economics Africa, told Daily Maverick.

There are some green shoots for the current quarter.

The Absa Purchasing Managers’ Index (PMI) rose by 6.7 points in July to 52.4 from 45.7 in June, bringing it back into positive territory and signalling a solid start to Q3 for the manufacturing sector.

**Read more:**[Absa PMI bounces back to positive levels in July, signalling solid manufacturing start to Q3](https://www.dailymaverick.co.za/article/2024-08-01-absa-pmi-bounces-back-to-positive-levels-in-july-signalling-solid-manufacturing-start-to-q3/)

The GNU was firmly in place in July — greatly reducing political risk concerns — and Eskom managed to keep the lights on during the last full month of winter. There were and still are local outages but no nationwide rolling blackouts to prevent a grid collapse.

Still, there are headwinds on the horizon, notably concerns that the US economy — the world’s largest — could be sinking into a downturn, which will have serious consequences for global demand.

But if the GNU can stay in place and start reversing the multiple failures of the South African state, then at least the domestic economic environment for manufacturing is looking brighter. **DM**