Statistics South Africa reported a 4.3% year-on-year decline in manufacturing production for May 2026, worse than economists' expectations.Key sectors contributing to the decline include food and beverages (-6.4%), basic iron and steel products (-5.6%), and wood/paper industries (-11.0%).Seasonally adjusted production rose 1.1% month-on-month but fell 1.0% quarter-on-quarter.

Economists attribute the downturn to structural challenges like logistics bottlenecks, port infrastructure issues, rising electricity costs, and the Middle East conflict.The war has disrupted global supply chains, pushing crude oil prices to $78 per barrel and exacerbating input costs.Analysts warn that while the 1.1% monthly increase is positive, it doesn't offset the three-month decline.Persistent infrastructure weaknesses and global uncertainty further strain the sector.Seven out of ten manufacturing categories contracted year-on-year, with food and beverages accounting for 22.2% of the decline.The Absa Purchasing Managers' Index also dropped, indicating weak demand and reduced business activity.Experts urge addressing logistics inefficiencies and infrastructure gaps to revive manufacturing growth.