Business Maverick: Absa PMI tumbles over nine points in April, signalling manufacturing contraction

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The Absa Purchasing Managers' Index, a key gauge of confidence in the manufacturing sector, slid to 50.7 in April from 60 in March. It is the lowest level since July 2021 when the wave of riots and looting smashed the economy and suggests that the ...

The Absa PMI for April is one of the first indicators of how the South African economy is faring in the second quarter of 2022. And it is not faring well.

So the slide to 50.7 from 60.0 in April is a major setback and as in July of last year, KZN’s woes – this time in the form of the lethal floods that washed across the province last month – are among the key factors behind the sudden fall in confidence. External demand hardly looks red hot in the wake of a surprise first quarter contraction in the US economy, sluggish European economic growth and harsh lockdowns in China.

“This suggests a sharp monthly contraction in manufacturing output at the start of the second quarter. Even businesses not affected by the flooding, either directly or indirectly, had to grapple with stage four load-shedding during the month,” Absa said.

 

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