South Africa’s Manufacturing Sector Faces Continued Contraction Amid Global and Domestic Pressures

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Business confidence in South Africa’s manufacturing sector declined notably in April, reflecting the combined impact of global trade tensions and local fiscal uncertainty. According to Absa, the seasonally adjusted Purchasing Managers’ Index (PMI) dropped to 44.7 points from 48.7 in March—marking the sixth straight month below the neutral 50-point level, a signal of sustained contraction.

The downturn is attributed to a combination of external and internal disruptions. Internationally, U.S. President Donald Trump’s April 2 announcement—dubbed “Liberation Day”—introduced sweeping tariffs on most U.S. imports, raising fears of a renewed trade conflict with China. Although a 90-day delay was granted for the most severe tariffs, the immediate uncertainty disrupted global supply chains and dampened manufacturers’ confidence.

Domestically, sentiment was further eroded by political infighting over fiscal policy. The government’s reversal of a planned VAT hike—after extended debate—has forced the finance ministry to draft a revised budget. Absa highlighted that both the international tariff environment and the unresolved domestic fiscal discord contributed to a more pessimistic outlook.

Further challenges included recurring load-shedding from scheduled power outages and unusually heavy rainfall in industrial hubs, both of which constrained production. The PMI serves as a key leading indicator for the manufacturing industry. Readings below 50 suggest contraction, while values above signal growth. The persistent decline underscores worsening conditions in a sector vital to South Africa’s economy.

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Amid broader economic uncertainty, business leaders are urging the government to implement clear, stabilising policy interventions. Absa’s full April report details significant declines in subcomponents like new sales orders and business activity. As South Africa braces for a revised budget announcement and closely monitors international trade dynamics, the manufacturing outlook remains cautious.