Manufacturing PMI returns to expansion at 52.6 in April

Manufacturing activity in South Africa has moved back into expansionary territory. The Absa Purchasing Managers’ Index edged above the neutral 50-point mark to 52.6 in April.

The seasonally adjusted rebound marks the sector’s first return to growth since last September and is an improvement from the 49 points recorded in March. The uptick was largely driven by stronger business activity and a sharp recovery in new sales orders.

Absa says some of this strength likely reflects firms bringing forward orders in anticipation of price increases linked to the Middle East conflict.

Economist Miyelani Maluleke says some of the pre-emptive buying seems to have played a major role in the uptick in April’s PMI, raising questions about how sustainable this momentum will be.

“I think that the one thing that’s very clear is that the environment is a lot more challenging today than it was a couple of months for manufacturers. On the cost side, it’s pretty clear that the pressures are really big. One of the things that we see when we look at the underlying PMI data is that firms are feeling quite a bit of cost pressure right now. The particular sub-index that measures input costs did shoot up quite significantly. We heard just today, of course, from the Department of Energy that, you know, we’re going to see diesel prices going up again, but about R6, we’re seeing petrol prices go up. So, there will be continued cost pressure,” says Maluleke.

VIDEO | Discussion on the effect of the petrol hike:

Maluleke warns that sentiment may dip below 50 in the months to come, as the conflict in the Middle East is expected to halt global growth momentum. He notes that before the conflict, domestic fundamentals were starting to improve on a number of fronts.

“We’re starting to see various areas of infrastructure starting to function a little bit better on the back of a lot of reform that the government has been pushing over the last few years. Those things are still there. I think those improvements are still there. The big challenge right now is, of course, the external environment that we’re facing. I think if there is to be a resolution that ends this conflict, I think that would certainly be positive. But at the moment, there really is still a huge amount of uncertainty in terms of how things are going to play out, and most importantly, as to whether the Strait of Hormuz is going to be opened, such that we don’t experience the supply chain crunches that we’re experiencing right now.”

The business activity index increased by 6.7 points to 52.8, also moving back into expansionary territory for the first time since late 2025.
This while, employment remains in contraction at 43.8 reflecting caution about hiring despite improved activity.