Johannesburg - The Bureau for Economic Research's (BER's) manufacturing survey showed that confidence in the sector increased by 11 index points to 41 in the fourth quarter of the year.
However, the BER's analysts cautioned that this did not detract from the fact that profitability in the sector "remained under considerable pressure".
The survey showed an improvement in demand. There was also a continued improvement in domestic sales volumes, with that indicator reaching a three-year high.
One of the main highlights was a better-than-expected export performance.
But BER economist Nkanyiso Hlongwa said that while demand for SA exports improved during the quarter, export selling prices came under pressure due to competition, the strong rand and low inflation.