Economic Outlook, April 2022
BER Weekly Review 16 May
Stress testing inflation
The failure of South African municipalities to deliver on their mandates has an impact on investment and economic growth. We explored the problems and causes of these failures in a BER report released last year.
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The BER is a proud recipient of the '21 Refinitiv StarMine Award for Most Accurate Forecasting. The award recognises forecasters who provided the most accurate predictions of SA economic indicators in Reuters Polls
The FNB/BER Civil Confidence Index declined to 9, from 15 in 2021Q4. Overall, a stabilisation in activity growth and an expectation that activity will improve further next quarter was unable to offset concerns about the slow pace at which project tenders are adjudicated and awarded.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) fell sharply to 50.7 index points in April 2022. This is the lowest level of the PMI since July 2021 when unprecedented looting and rioting shook local production and demand. As was the case then, the decline in the headline PMI was due to a sharp drop in the business activity and new sales orders indices, this time amid devastating flooding in parts of KwaZulu-Natal (KZN).
After remaining unchanged at 43 points in the fourth quarter of 2021, the RMB/BER Business Confidence Index (BCI) increased to 46 in the first quarter of 2022. The improvement in sentiment points to the economic recovery, temporarily interrupted in the third quarter of last year, having continued into 2022. Unfortunately, the stagflationary shock brought about by Russia’s invasion of the Ukraine has now triggered a significant degree of uncertainty around global, and by implication, SA’s GDP growth prospects.
The FNB/BER Consumer Confidence Index (CCI) declined from -9 to -13 index points during the first quarter of 2022. The slump in the CCI during the first quarter of 2022 can be ascribed to marked declines in the economic outlook and household financial position sub-indices of the CCI. Confidence levels of high-income households declined sharply, while the confidence level of middle-income households sagged. Low-income confidence further extended its recovery.