The Absa PMI fell sharply in August, the latest sign that confidence is ebbing from the economy. The index effectively measures the expectations of purchasing managers, whose decisions to buy today are based on assumptions regarding the future performance of their businesses. As things stand, their assumptions are not great.

South Africa's seasonally adjusted Absa Purchasing Managers' Index (PMI) declined in August to 45.7 from 52.1 in July, a sharp decline into the red as any reading below 50 is seen as being in negative territory. Each of the five major components that comprise the index were below the neutral 50-point mark.

"Respondents continued to be fairly downbeat about exports for a third straight month, while domestic demand likely also weighed on orders," Absa said.

The decline was significant, but it came after an unexpected bounce from 46.2 points in June to 52.1 points in July. This was the first time since December 2018 that it had been above the neutral 50 point mark. Given the generally poor confidence levels in the economy, it was perhaps unrealistic to expect it to remain in positive territory. And there were also mounting concerns in August about the US/China trade war and the...