The latest Absa Purchasing Managers’ Index (PMI) for April 2025 points to a deterioration in manufacturing sentiment. The index remained in contraction for a sixth straight month.
The seasonally adjusted PMI fell by 4 points to 44.7 in April, the weakest reading since November 2023. Respondents noted weaker demand and growing uncertainty linked to global tariffs, local politics, and heavy rainfall affecting production
Key highlights from the March 2025 PMI include:
- Business Conditions Outlook Weakens Sharply: The index tracking expected business conditions in six months’ time fell by 9.4 points to 48.6. This is the first sub-50 reading since November 2023, with sentiment likely dampened by renewed load-shedding, global tariff tensions, and political uncertainty around VAT policy and governance disputes.
- Business Activity Contracts: The business activity index dropped by 8.3 points to 40, reflecting sluggish output in response to softer demand conditions.
- New Sales Orders Decline Significantly: The new sales orders index plunged by 12.8 points to 36.1. Both domestic and export demand weakened, with the export index falling back into contractionary territory.
- Supplier Delivery Times Lengthen: The supplier deliveries index increased by 2.5 points to 56.6. Given the index is inverted, this suggests slower delivery times, likely due to supply chain bottlenecks exacerbated by weak activity levels and logistical delays.
- Ongoing Employment Pressure: The employment index declined by 3.2 points to 42.9, now remaining in contractionary territory for 13 consecutive months. Persistently weak demand and increased competition from imports have forced manufacturers to cut back on staffing.
- Slight Uptick in Inventories: The inventories index rose modestly to 47.8 from 45.9. Some respondents cited pre-emptive stockpiling ahead of potential price hikes linked to global tariffs.
- Cost Pressures Rise Despite Fuel Relief: The purchasing price index increased by 3.8 points to 68.3. This rise came despite fuel price cuts in early April, driven instead by a weaker rand during the first half of the month, which inflated the cost of imported inputs. The currency has since firmed below R19/$.
The April PMI results reflect growing headwinds for South Africa’s manufacturing sector, particularly from weak demand, uncertainty around policy, and emerging global trade frictions.