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Domestic data was somewhat more encouraging this week. The Absa PMI moved back above the neutral 50-point mark in September, supported by a sharp rebound in new sales orders, while new vehicle sales remained robust. Producer inflation eased further in August, although renewed fuel-price pressure is likely to reverse some of that relief in coming months. Formal employment data were softer, while private-sector credit growth was little changed overall, with household credit continuing to recover gradually
Essential and Premium Insights clients can read the full BER Weekly Review for our assessment of the easing in oil-market pressure, the sharp rise in global bond yields, the implications for the rand and domestic borrowing costs, and our latest forecast view on interest rates and inflation.
Absa Purchasing Managers’ Index (PMI) rose by 4.9 points to 50.7 index points in September 2026, returning above the neutral 50-point mark after three consecutive months in contractionary territory. Overall, the September PMI marks a welcome improvement after a weak winter period, particularly given the sharp rebound in new orders. However, the signal is not uniformly positive as business activity, employment, and order backlogs remained subdued. Moreover, logistics disruptions appear to have artificially boosted the supplier deliveries component of the headline PMI, while purchasing price pressure reaccelerated. Click here for more
According to Naamsa, new vehicle sales closed the third quarter on a solid footing, with domestic new vehicle sales rising by 12.7% y-o-y, as passenger vehicle sales rose by 14.7%. In contrast, the external demand environment remained tough, with exports continuing to underperform, declining by 18.8% y-o-y in September, down from an 11.7% decline in the prior month.
Stats SA reported some good news on factory-gate price trends. The rate of increase in producer price inflation (PPI) for final manufactured goods eased to 5% y-o-y in August from 5.7% y-o-y in July. This marks a third consecutive month of moderating producer inflation on the back of a 0.4% m-o-m decline. Though food, beverages and tobacco products (-0.3% y-o-y) subtracted 0.1% pts from the headline, the slowdown largely reflects lower prices for coke, petroleum, chemical and plastic products (-1.4%), subtracting 0.3% pts. However, some of this relief may reverse in upcoming PPI prints as fuel-price pressures reaccelerate.
Moving on to the latest jobs data, Stats SA’s Quarterly Employment Statistics (QES) showed a 0.1% q-o-q decline (or -14 000) in formal non-agriculture employment in 2026Q2. Manufacturing shed the most jobs (-20 000), followed by business services (-13 000). The job declines in four of the eight sectors were partially countered by some job gains in the four remaining sectors, led by community services (+29 000). Disappointingly, formal employment fell by 0.9% y-o-y in Q2 (-95 000).
Finally, according to the SARB, private-sector credit growth was little changed at 7.47% y-o-y in August, from 7.41% in July. The composition continued to shift, however. Corporate credit growth edged down from 9.3% y-o-y in July to 9.2% in August, while household credit growth continued its gradual recovery, rising from 5.1% to 5.3%.
The NBS manufacturing PMI increased to 50.1 in September from 49.8 in August, putting the official index back in expansionary territory after two months below the neutral 50-point mark. The increase was supported by stronger production, with the production index hitting a 9-month high of 51.7. While new orders also improved, raw material inventories and employment continued to decline. The headline improvement, therefore, points to firmer momentum, although conditions remain mixed beneath the surface.
Meanwhile, RatingDog's manufacturing PMI rose to 52.1 in September, up from 51.5 in August, marking the sector's 10th consecutive month of expansion. Output accelerated at the fastest pace in five months amid rising domestic and overseas demand. Heightened production requirements supported purchasing activity and employment in the sector. Input cost pressures rose to a four-month high and firms raised output prices in response. Even so, firms are optimistic about future growth, underpinned by expectations of an improvement in the global macroeconomic environment over the coming year.
Looking at the composite indices, broader growth momentum improved. With RatingDog at 52.4 and the NBS rising to 50.7, both composite indices are in expansionary territory. Although external demand remains an important source of uncertainty for China’s export-heavy economy, the September readings suggest that activity ended the quarter on a firmer footing.
The Federal Reserve's (Fed) preferred inflation measure, core PCE, came in at 3% y-o-y in August, matching the lowest level reached this year. Markets expected a print of 3.3%, although their judgement was made prior to a revision in July's figure from 3.3% to 3%. The release also incorporated methodological changes to three sub-indices, which complicates comparison with earlier readings. On a monthly basis, core PCE rose by 0.2% in August.
The annual change remains above the Fed's inflation target of 2%, although the softer release provides some reassurance after the FOMC raised the policy rate by 25 bps in September. Even so, one softer print is unlikely to settle the policy debate. The key question is whether inflation continues to moderate sufficiently to alter the Fed’s recently more hawkish policy stance.
The ISM manufacturing PMI edged down from 54.6 in August to 54.5 in September, remaining well in expansionary territory. From the 5 main subindexes, the marginal headline decline was dragged by a slowing in the growth of production index (58.3; -1.6% pts) and the inventories index falling into contractionary territory from 50.6 to 48.6, signalling that heightened demand is starting to drawdown on stockpiles. The price index remains elevated (77.9, +6.8% pts) as high input prices persist. However, new orders continue to accelerate (53.7, +1.6% pts), and although supply delivery times slowed marginally (59, -0.3% pts), the overall momentum suggests that the manufacturing sector should bolster the Q3 GDP print.
After an unexpectedly sharp 3.2% decline in July, retail sales in Germany grew 1.3% in August. However, compared to the same month last year, retail sales were still down by 0.4%. Higher fuel and gas prices continue to constrain consumer spending, as evidenced by an 8.7% y-o-y decline in turnover at petrol stations.
Pressure on household budgets is likely to persist while oil and fuel prices remain elevated. Energy inflation accelerated by 14.9% y-o-y, lifting Germany's inflation rate from 2.9% in August to 3.3% in September. More positively, core inflation held steady at 2.4%, suggesting that although price pressures persist, they have not broadened materially beyond the energy shock so far.
Friday, 02 Oct 2026
