The Gibbons Report: 5 May 2026

The Absa Purchasing Managers’ Index has reached its highest level in two years – driven by business activity and new sales orders. It’s thought that this might be a case of manufacturers front-loading ahead of price increases due to the Iran war. The Index, which measures manufacturers’ sentiment, came in at 52.6 index points – up from 49 in March. It’s the first reading above 50 since September 2025 and, remember, anything above 50 indicates expansion, anything beneath contraction. The Business Activity sub-index came in at 52.8 from 46.1 the previous month, and new sales increased to 52.9 from 44.5. Commenting, Absa says the latest readings suggest that production has picked up meaningfully. On the downside, petrol and diesel will jump sharply tomorrow. Diesel will top R32 per litre for the first time ever – an increase of 24% - while 95-octane petrol will go to R26.63 inland. The diesel price is a massive blow for anyone using trucks to transport goods, but especially agriculture – think tractors, harvesters and so on. Stand-by for a sharp increase in inflation – the Reserve Bank has already forecast 4.3% for April, up from 3.1% in March. And with that, of course, a likely hike in interest rates. Retailer Pick n Pay has started a formal Section 189 consultation process to overhaul its labour model. It’s proposing various changes to employment conditions, including cuts to Sunday pay and new rosters requiring full-time staff to work weekends. It’s an indicator of the pressure Pick n Pay is under as CEO Sean Summers and his team attempt a turnaround. Summers says Pick n Pay has for years carried labour costs sharply above market norms, weighing on competitiveness. He says Pick n Pay store workers earn double pay on Sundays, while other retailers only time and a half. Trade union SACCAWU has rejected the planned changes. On the markets, oil is sharply back up and the rand weaker as the US-Iran ceasefire wobbles. Both sides have exchanged fire, pushing Brent Crude oil back up $113 per barrel. With the dollar remaining firmer at $1.17 to the euro, the rand is under pressure: R16.81 to the US unit, R19.64 to the euro and R22.73 to sterling. The JSE closed last evening with both the All Share and Top 40 down half a per cent. No London, closed for a bank holiday, but in New York the Dow was down 1.1% - the S&P 500 down 0.4% and the Nasdaq down 0.2%. Tokyo still closed this morning – Hong Kong down 1.1% - Sydney down 0.5%. Gold - $4,536 – platinum $1,969 – and Bitcoin - $80,900.