South Africa takes a hit

South African factory sentiment edged deeper into contractionary territory in February, declining for a fifth month amid concern about global trade, a US spat with Pretoria and the return of power cuts.

Absa’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, fell to 44.7 from 45.3 in January, the Johannesburg-based lender said Monday in an emailed statement.

The median of three economists’ estimates in a Bloomberg survey was 45. 

Confidence weakened as measures of business activity, new sales, and the employment index declined, signalling the factory sector remains subdued after a weak performance at the end of 2024.

A gauge of expected business conditions in six months time also fell “as uncertainties around global trade, SA-US relations, and the return of load-shedding weighed on sentiment,” Absa said, referring to the South African term for scheduled power cuts that were reinstated for several days in February after a 10-month break.

The US president has roiled global trade by threatening a raft of tariffs. He’s also frozen assistance to South Africa over false claims it was confiscating land.

The South African authorities haven’t seized any private land since the end of apartheid in 1994.

The business activity gauge fell to 40.6 from 43.5 in January, new sales orders declined to 38.7 from 42, the employment index was at 42.2 from 44.4, and the index tracking expected business conditions in six months’ time fell to 60.5 in February from 64.9. 

The overall PMI peaked at 53.3 in September amid optimism over the post-election formation of a new business-friendly governing coalition. It’s declined every month since then.