South African business sentiment remained in contractionary territory for a fifth straight month as a recovery in demand struggles to pick up pace amid uncertainty about deteriorating relations with the US.

Absa Group’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, rose to 48.7 in March — below the 50 level that indicates an expansion and compared with 44.7 in February, the Johannesburg-based lender said Tuesday in an emailed statement.

“Comments from respondents indicate that logistical issues at the ports remain, and souring relations with the biggest economy in the world is bringing uncertainty – although it may not be affecting trade at the moment,” it said.

South Africa’s relations with the US have become increasingly strained since President Donald Trump took office in January. The US leader has criticised South Africa on several fronts, including over its land-expropriation policy and for a case it brought before the International Court of Justice accusing Israel — a key American ally — of genocide.

In the first quarter of 2024, the PMI averaged 46.2, compared with 49 in the previous three months, Absa said. Its measure tracking business activity increased to 48.3 on the back of improved demand, while new sales orders surged to 48.9 from a previous 38.7 as export sales saw a turnaround.

“Export sales showed significant gains in the export markets, with sales returning to expansionary territory for the first time in four months,” the lender said. “This is despite the current global trade disagreements and logistical issues.”

Expected business conditions in six months’ time decreased to 58, falling below the 60-point mark and to the lowest since May 2024 as the return of scheduled power outages and fraying ties with the US weighed on sentiment.