A gauge of South African manufacturing sentiment dropped sharply in April, with survey respondents citing uncertainty linked to global trade tensions and local politics.
Source: Reuters.
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.
It was the sixth straight month that the headline PMI has been below 50, reflecting a contraction in activity.
US President Donald Trump’s 2 April “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.
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.
