Election time is usually a volatile time for economies. The South African economy did not escape the effect of politics in May.Manufacturing output was up more than expected in April, although it is doubtful how long it will last, while the politics around the election affected business confidence in May.
Seasonally adjusted manufacturing production increased sharply by 5.2% in April compared to the 2.5% decrease recorded during March compared to February. Van der Linde says the uptick in manufacturing output for April sets a better starting point for the second quarter of 2024. “Although no load shedding was implemented during April, overall demand for manufactured goods is still fundamentally weak and it remains to be seen whether this momentum carried over to May as the manufacturing PMI fell below the neutral 50 level in that month.”
“The advent and outcome of the national and provincial elections near the end of May 2024 had a notable effect on business confidence during April and May 2024,” the organisation said in a statement.Business confidence dipped in May The decrease in overseas tourists and the decline in merchandise import volumes particularly weighed on the index in May, while the main but modest positive impacts came from merchandise export volumes and new vehicle sales, SACCI says.