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South African factory mood sours sharply in April, Absa PMI shows


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South African factory mood sours sharply in April, Absa PMI shows

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Photo by Creamer Media

2nd May 2025

By: Reuters

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A gauge of South African manufacturing sentiment dropped sharply in April, with survey respondents citing uncertainty linked to global trade tensions and local politics.

The seasonally-adjusted Purchasing Managers' Index (PMI) sponsored by South African bank Absa declined to 44.7 points in April from 48.7 in March.

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It was the sixth straight month that the headline PMI has been below 50, reflecting a contraction in activity.

US President Donald Trump's April 2 "Liberation Day" tariff announcement ushered in sweeping duties on most imports to the United States, sparking a trade war with China and uncertainty for companies worldwide.

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Trump later paused most of the steepest tariffs for 90 days, but economists say many businesses have been left in a state of paralysis.

In South Africa months of wrangling over the budget culminated in the finance minister scrapping a planned increase in value-added tax (VAT), meaning he will have to present a new budget next month.

"Global tariff developments and local political uncertainty because of the VAT saga and open disagreements within the government likely weighed on sentiment," Absa said in a statement.

Other local factors dampening the mood included excessive rains and the return of scheduled power cuts.

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