By Thanda Sithole
Manufacturing output remains weak in February
Manufacturing output (not seasonally adjusted) declined by 2.8% y/y in February, following a 0.1% decline in January (previously -0.7%). This was weaker than the Bloomberg consensus expectation of a mild 0.1% decline.
On a seasonally adjusted basis, which is more relevant for quarterly GDP calculations, output fell by 2.2% m/m in February, after expanding by an upwardly revised 1.9% in January (originally 1.5%). The weakness was consistent with the Manufacturing PMI Business Activity Index, which fell to 45.7 in February from 51.4 in January. Importantly, in the three months to February, seasonally adjusted manufacturing output declined by 2.0%, reinforcing the likelihood that the sector remained a drag on GDP growth in 1Q26.
Outlook
Manufacturing output in the first two months of 2026 was 1.5% lower than in the corresponding period of 2025, with six of the ten manufacturing divisions recording contractions.
The sector is likely to remain under pressure in 1H26, amid elevated uncertainty related to Middle East tensions and persistent fuel-related input cost pressures. In addition, the Manufacturing PMI Expected Business Conditions Index dropped sharply to 46.0 in March from 68.8 in February, suggesting that manufacturers expect operating conditions to remain challenging in the near term.
Selected sector analysis
The February weakness was broad-based, with seven of the ten manufacturing divisions recording lower output (see Figure 1). The largest contractions were recorded in wood and wood products (-9.7%), furniture (-5.8%), food and beverages (-4.5%), basic iron and steel (-3.6%) and motor vehicles, parts and accessories (-3.1%).
Within the motor vehicles, parts and accessories category, motor vehicle output declined by 1.6%, while parts and accessories fell by 4.9%.
