Economists expect a severe contraction in the Absa manufacturing PMI, which will be released on Monday.The Sandton CBD in Johannesburg, empty and unproductive during the Covid-19 lockdown. Picture: SEBABATSO MOSAMO
But if the experience from around the world is anything to go by, the effect of the lockdown evident in the April release, which is due out on Wednesday, could be staggering.For instance, the flash IHS Markit Eurozone Composite PMI slumped to a historic low of 13.5 index points in April, significantly below the previous trough of 36.2 points registered during the global financial crisis.
In March, SA’s manufacturing PMI rose surprisingly to 48.1 from 44.3 the previous month. However, this was partly because slower delivery times artificially raised the supplier deliveries subindex. Usually, delayed deliveries signal that suppliers are busier than normal, a positive indicator. However, during the pandemic it mainly reflects negative disruptions to global supply chains.
New-vehicle sales for April are also due out on Monday. Having plunged by almost 30% year on year in March, the April reading is likely to be down 80-90% year on year, reflecting the closure of car dealerships and near complete cessation of economic activity due to the lockdown.
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ECONOMIC WEEK AHEAD: Indices will give a first glimpse of lockdown lossesReports out this week could be staggering in what they say about the sorry state of the economy
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