The seasonally adjusted Absa Purchasing Managers’ Index has dropped below 50 points in May 2024, as businesses report trouble with household consumption and a hold on activity around the national elections.
“Numerous respondents said that orders were put on hold as clients waited for the election results. The PMI has been in contractionary territory for three out of five months this year, as the manufacturing sector seems volatile in an election year,” it said. Export sales also fell back in May, putting further pressure on demand. Supplier problems in Europe affected some of the local manufacturers in the transport sector, as there were delays in the deliveries of the necessary parts used as input in the local market.
While things were bleak for businesses in May, the BER noted that the results did contain some good news, as the index for expected business conditions in six months’ time increased to 57.6 in May from 55.7 in April. The party has the option of entering coalitions with the DA and other “business-friendly” parties, which would boost the economy, investment and business operations. However, the party could also team up with anti-business radicals in the EFF and MK to form a government, in which case the opposite might become reality.