South Africa’s manufacturing sector witnessed a notable decline in business confidence during April, as global trade instability and domestic fiscal policy uncertainty continued to weigh on industrial sentiment. According to data released by Absa, the seasonally-adjusted Purchasing Managers’ Index (PMI) fell to 44.7 points, down from 48.7 in March. This marks the sixth consecutive month the index has remained below the neutral 50-point threshold, indicating ongoing contraction in manufacturing activity.
The April decline is attributed to a convergence of external and internal disruptions. On the international front, the announcement by U.S. President Donald Trump on 2 April — referred to as “Liberation Day” — introduced broad tariffs on most imports into the United States, prompting fears of a renewed trade war with China. Although the U.S. administration subsequently postponed the most punitive duties for a 90-day period, the interim uncertainty has already disrupted global supply chains, leaving manufacturers in a state of strategic hesitation.
Domestically, sentiment was further depressed by prolonged political discord over fiscal policy. After months of debate, the South African finance ministry abandoned its plan to increase the value-added tax (VAT), a reversal that now necessitates the tabling of a revised national budget. Absa noted that “global tariff developments and local political uncertainty because of the VAT saga and open disagreements within the government likely weighed on sentiment”.
Other contributing factors included persistent load-shedding due to the reintroduction of scheduled power outages and unusually heavy rainfall in key industrial regions, both of which hindered production capacity.
The PMI is a widely used leading indicator of economic activity in the manufacturing sector. A reading below 50 typically signals contraction, while a value above 50 points to expansion. The sustained negative trajectory of the index suggests deteriorating conditions in one of South Africa’s most crucial economic sectors.
This latest data comes amid growing concerns over the trajectory of the domestic economy, with business leaders increasingly calling for decisive policy measures to restore investor confidence and stabilise the macroeconomic environment.
Absa’s full April PMI report offers further insights into the breakdown of subcomponents, including new sales orders and business activity, both of which showed significant declines.
As South Africa prepares for a new fiscal presentation and monitors the evolving global trade landscape, the outlook for the manufacturing sector remains cautious.
