South Africa's Absa PMI Edges to 49.0 in March but Expected Conditions Collapse by Record 23 Points on Tariff Shock

South Africa's Absa PMI Edges to 49.0 in March but Expected Conditions Collapse by Record 23 Points on Tariff Shock

JOHANNESBURG, 1 April 2026. South Africa's seasonally adjusted Absa Purchasing Managers' Index rose 1.6 points to 49.0 in March, narrowly short of the neutral 50-point mark that separates expansion from contraction and marking a sixth consecutive month of sub-50 readings, while the forward-looking expected business conditions sub-index collapsed by a record 22.9 points, the largest single-month decline in the survey's history, as manufacturers reacted to the scale of United States trade tariffs.

The March headline improvement reflected a modest 0.4-point recovery in the business activity sub-index to 46.1, suggesting that production conditions, while still contractionary, were slightly less adverse than in February. New sales orders continued to weaken, however, falling a further 0.7 points to 44.5, a reading that indicated demand from both domestic and export customers remained subdued. Supply-chain pressures intensified sharply, with the supplier deliveries index jumping 6.8 points to 62.1 as port and logistics delays persisted.

The most striking element of the March data was the collapse in the expected business conditions index, which fell by 22.9 points, the steepest drop ever recorded in the survey. Analysts attributed the exceptional decline to the rapid repricing of the outlook following the Trump administration's sweeping tariff announcements. South Africa had been subject to a 30% tariff on most goods exported to the United States since August 2025, subsequently reduced to 10% under a temporary section 122 trade measure effective from February 2026, though uncertainty about whether this relief would be extended beyond its July 2026 expiry date weighed heavily on manufacturer sentiment. The automotive sector, one of South Africa's largest manufacturing exporters to the US, had already seen vehicle exports to the United States fall sharply.

Cost pressures also intensified markedly, with the relevant sub-index rising 11.3 points, a development economists said would further erode margins already squeezed by rand weakness and elevated energy costs, even as oil prices moderated slightly from their recent peak.

The March PMI data served as a signal that while domestic manufacturing had not deteriorated markedly during the month, the external environment had shifted materially in the direction of risk, with the tariff shock appearing likely to weigh on investment decisions and export-oriented production in the quarters ahead.

The Absa PMI is compiled monthly by Absa and the Bureau for Economic Research from surveys of senior manufacturing-sector purchasing and supply managers.