How can I capture the current directory as an absolute pathname in a make variable?

Um, no, $PWD is sometimes defined in your environment and thus inherited by make, but oftentimes not. You need $CURDIR.

DIR := ${CURDIR}

If you have one makefile including another in a different directory, PWD and CURDIR aren't updated for the child makefile. If that second makefile needs to know where it is, the following will tell you.

$(dir $(realpath $(lastword $(MAKEFILE_LIST))))