This report covers the key domestic and international data releases over the past week. The more comprehensive BER Weekly Review (Enhanced Version) 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 (sign up here – it’s only R210/month and you get more benefits) and BER Premium Insights clients.

DOMESTIC DATA

Lebohang Namo

MANUFACTURING PRODUCTION CONTRACTS FOR A SECOND CONSECUTIVE MONTH

According to Stats SA, factory output declined by 1.5% y-o-y in August. This follows a downwardly revised 1.3% drop in the previous month and below consensus of -0.6%. The biggest drag came from non-ferrous metal products, metal products and machinery (-5.9%, -1.3%pts), followed by the food and beverages subsector (-3%, -0.7%pts). On a seasonally adjusted (sa) basis, production rose by 0.4%, partially reversing the 0.8% monthly decline in July.

INTERNATIONAL DATA

Nadia Matulich

FED MINUTES SIGNAL THE POTENTIAL FOR FURTHER RATE CUTS

The US Fed released the minutes of its September meeting, when the Fed cut rates by 25bps, setting the target range for the federal funds rate at 4-4¼%. At the time, the accompanying statement cited moderating economic activity, elevated inflation, and rising unemployment, with uncertainty about the outlook as the main factor influencing the decision.

The minutes add colour to the discussion. On the surface, the data does not appear alarming: Q2 GDP growth was relatively strong at 3.8% (Q1: -0.6%), unemployment edged up only slightly (from 4.2 to 4.3% between July and August), and inflation remained somewhat elevated at 2.7% for headline PCE and 2.9% for core PCE. However, the discussion highlights growing concern about the sources of risk. The Committee noted that “substantial downside risks” had emerged, and that uncertainty was being driven largely by domestic policy choices, specifically: trade, immigration, fiscal spending, and regulation.

The staff projected that growth would remain subdued through 2025 before picking up again in 2026, with unemployment expected to rise modestly before gradually returning toward its natural rate. Tariff effects on inflation were described as milder than expected and likely to be transitory, although the 90-day tariff pause had only recently expired. Excluding the impact of tariffs, inflation was estimated to be near the 2% target. Participants also noted that lower net immigration could reduce both demand and inflation, partially offsetting tariff pressures.

All participants supported a rate cut, with only Stephen Miran preferring a larger, 50bps move. Most judged that further easing would likely be appropriate later this year, but emphasised that policy had shifted toward a more neutral stance.

ISM SERVICES PMI SHOWS SOME TARIFF STRAIN

The other key release of the week also came from the US, which was the ISM Services PMI. The September print came in at 50 (52 in August), indicating neither expansion nor contraction. The Business Activity Index registered 49.9, down 5.1 points from August and marking its first contraction since May 2020, amid a sharp drop in new orders. Employment remained weak for a fourth consecutive month, at 47.2 (46.5 in August).

The price index was the most notable element of the report, rising to 69.4 in September from 69.2 in August, remaining above 60 for the tenth straight month. Survey respondents reported that businesses were beginning to feel the effects of tariffs on operations and costs. Some also noted continued strong demand from AI-related infrastructure investment, alongside renewed supply chain pressures.