This report covers the key data releases domestically and internationally over the past week, as well as updates on crucial structural reform initiatives. It is a shortened version of the more comprehensive BER Weekly Review (Enhanced version), which includes a detailed discussion on the main economic events and developments over the past week, a summary of upcoming data (the week ahead) and the BER’s forecast for key economic indicators. The full Weekly is only available to BER Essential Insights subscribers and BER Premium Insights clients. For more on our products and services, please see our product and offering page here.

DOMESTIC DATA

Damian Maart

RETAIL SALES GROWTH SLOWS NOTABLY, BUT IS POSITIVE ON A QUARTERLY BASIS

Retail sales growth fell well short of market expectations of 3.3% y-o-y, posting a 1.6% increase in June (vs 4.3% in May). The softer growth was largely driven by a slowdown in the sales of textiles, clothing, footwear and leather goods (4.6% y-o-y in June vs 12.6% in May), general dealers (-0.2% vs 3.4%), and food, beverages and tobacco in specialised stores (-4.5% vs -2.4%). Meanwhile, pharmaceuticals, medical goods, cosmetics and toiletries (4.2% vs 1.7%), and hardware, paint and glass sales saw a noteworthy improvement. While sales were flat on a monthly basis (seasonally adjusted,sa), sales posted a 0.9% q-o-q expansion. This bodes well for GDP.

Wholesale trade sales contracted at a slower pace of 1.7% y-o-y in June compared to a 3.7% decline in May. This marked the slowest rate of contraction in the past three months. Moreover, sales (sa) fell by ‘just’ 0.4% m-o-m in June (vs -1.7% in May). However, wholesale sales declined by 0.4 q-o-q (sa) in Q2.

Motor trade sales grew at a slower annual rate of 3.1% in June, down from 4.1% in May. Sales were flat monthly, and quarterly growth was marginal at 0.6% (sa).

MANUFACTURING AND MINING PRODUCTION SURPRISE TO THE UPSIDE

Positive for Q2 GDP dynamics, manufacturing production (sa) grew by 1.5% q-o-q, following a 1.9% decline in Q1. On an annual basis, manufacturing production growth also surprised to the upside, exceeding market expectations of 0.8% by rising to 1.9% in June. This uptick was mainly driven by a 6% y-o-y increase in the food and beverages category (contributing 1.4%pts) and a 1.9% rise in petrochemicals (contributing 0.4%pts).

Like factory output, mining production outperformed expectations, showing a notable improvement with an increase of 2.4% y-o-y - its second month of growth. The biggest boost to the annual performance came from PGMs (growing by 3% and contributing 1%pt) and coal (3.7%; 0.8%pts). Monthly production growth slowed to 0.2% m-o-m in June compared to 3.9% in May. Nonetheless, overall mining production is set to make a positive contribution to GDP growth in Q2, recording a 3.9% q-o-q (sa) rise.

UNEMPLOYMENT RATE EDGES UP IN Q2

According to Stats SA’s Quarterly Labour Force Survey (QLFS), the unemployment rate rose to 33.2% in Q2, up from 32.9% in Q1. While the number of employed rose by 19 000 q-o-q, the number of unemployed increased by more (140 000), resulting in the bump in the unemployment rate. The number of people classified as not economically active due to discouragement declined by 0.8% (28 000), while those not economically active due to other reasons remained the same between the two quarters. This decline pushed the expanded unemployment rate down by a modest 0.2%pts, to 42.9% in Q2, which remains worryingly high.

Employment expanded in four of the ten sectors. Trade (+88 000) saw the biggest increase, and community and social services (-42 000) recorded the biggest decline.

SA REFORM MONITOR

Roy Havemann

Business Leadership South Africa (BLSA) has introduced the Reform Tracker, available at https://tracker.blsa.org.za/. This platform provides an up-to-date overview of SA’s progress across multiple critical areas, helping stakeholders track progress.  

The tracker highlights challenges and areas needing attention, encouraging accountability and transparency. A Quarterly Review will provide a summary of progress each quarter (see https://tracker.blsa.org.za/quarterly-review/ ). Notably, the past quarter saw a surge in reform momentum. That said, while reforms are welcome and continuing, there is still a need for conversion into economic growth. The tick up in the unemployment rate this week highlights this.   

The Quarterly Review notes 26 reforms completed, 59 showing strong progress, 108 on track but needing attention and 19 facing major obstacles.  

The BER participated in the panel discussion at the Johannesburg launch, and will also participate in Cape Town later today. The tracker highlights the sheer number of reforms that are ongoing. This creates bandwidth concerns and the need to “prioritise priorities”. There also needs to be a close interface with the government’s own performance monitoring system (the medium-term development plan and medium-term strategic framework, which links directly to departmental performance plans).

INTERNATIONAL DATA

Nkosiphindile Shange

US CONSUMER INFLATION LOWER THAN EXPECTED; BUT UNEXPECTED SURGE IN PPI

According to the BLS, the US CPI for July came in at 2.7% y-o-y (0.2% m-o-m), the annual rate unchanged from June, but below the consensus. Food prices remained flat while energy prices fell by 1.1%. Meanwhile, US core inflation, which excludes the volatile food and energy prices, came in at 3.1% y-o-y and 0.3% m-o-m.

However, the latest US PPI – a leading indicator of consumer inflation- came in at 0.9% in July (m-o-m), significantly above the expectations of 0.2%. Annual PPI jumped to 3.3% in July, above expectations of 2.5%, suggesting that there could be a potential rise in consumer inflation on the horizon.

UK GDP WEAKER IN Q2 BUT GROWS FASTER THAN EXPECTED

UK GDP growth in Q2 was 0.3%, better than the expected 0.1%, but lower than Q1 growth of 0.7%. On an annual basis, growth was 1.2%, higher than the 1% Reuters consensus. Construction fell by 1.2% while the services sector fell by 0.4%. The manufacturing sector fell by 0.3% as tariff front-loading seen in Q1 unwinds. On the expenditure side, growth came from government spending and fixed investment as household consumption was muted due to weak tourism revenues. The unemployment rate remained unchanged at 4.7% even though the job openings fell by 5.8% to 718 000, indicating a gradual cooling as employers were not replacing the staff who had left.

EUROZONE ECONOMIC SENTIMENT DETERIORATES AS THE US DEAL DISAPPOINTS

The Eurozone ZEW Indicator of Economic Sentiment declined by 11 points to 25.1 in August 2025, falling below market estimates of 28.1. Only 34.6% of the surveyed analysts predicted an improvement in economic conditions, 55.9% expected no change, and 9.5% anticipated a deterioration. In the meantime, the indicator of the current economic situation decreased by 7 points to -31.2. The German ZEW Economic Sentiment Index dropped sharply in August, breaking the positive trend seen in the previous months, falling to 34.7 points in August from 52.7 in July. This significant decline was attributed to the disappointing EU-US trade deal and a weaker-than-expected German economy.