Kagiso Purchasing Managers' Index (PMI) increased in April after a slight decline in March, it was announced on Thursday.
Kagiso said the improvement to 50.5 points, from 49.3 in March, was largely driven by improvements in new sales orders and business activity indices.
The PMI is a key indicator of the economic health of South Africa's manufacturing sector.
"The PMI results for April show marginal improvements amid challenging conditions, and the outlook for the sector is relatively more positive," Kagiso Asset Management research head Abdul Davids said in a statement.
Kagiso warned that while the improvement is a positive sign, the level of the index at just above 50 "continues to suggest that manufacturing output remains under pressure."
The new sales orders index increased by 1.7 points to 53.7 while the inventory industry declined 8.6 points to 47. Davids said the decline was due to manufacturers de-stocking.
"Our key trading partners continue to grapple with tough conditions. Preliminary PMI results for April show that the Eurozone reached a four-month low of 46.5, while China dropped to a two-month low of 50.5," he said.
The employment index declined to 42.1, and was at its lowest level since July 2011.
The price index declined by 9.3 points to 78. It was its first decline in eight months.
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