JOHANNESBURG - South African manufacturing sentiment fell in December to its lowest ‍level for 2025, ‍driven by steep declines in inventories and ​employment sub-indices, a purchasing managers' index (PMI) survey showed on Thursday.

The seasonally-adjusted ⁠PMI sponsored by South African bank Absa fell to 40.5 points ⁠in December ‌from 42.0 in November, concluding a year marked by predominantly contractionary readings in negative territory.

A reading ⁠below 50 indicates a contraction in activity, while above 50 signals growth.

The sub-index tracking employment decreased by 6.3 points in December, falling further below the ⁠neutral 50-point mark and remaining ​in contractionary territory since April 2024, Absa said in a statement accompanying ‍the survey's results.

"The weak performance in business activity and volatile sales ​orders continues to limit the scope for hiring, while shortages of specialised skills in certain niche industries also weigh on employment outcomes," said Absa.

The inventories sub-index declined by 9.9 points to 36.1 in December, the lowest since May 2020.

U.S. President Donald Trump imposed a 30% tariff on South African exports to the U.S. in August last ⁠year, the highest rate in Sub-Saharan ‌Africa, a move that could cause tens of thousands of job losses in sectors like agriculture and carmaking.

ABSA ‌said only ⁠strong economic growth and recovery will lead to better employment ⁠outcomes.