After gaining 4 points in 2017Q4, the FNB/BER Civil Confidence Index fell to a record low of 12 in 2018Q1. The current index level means that close to ninety per cent of respondents are dissatisfied with prevailing business conditions.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) erased the losses sustained in March and edged back above the neutral 50-point mark in April. The index rose by 4 points to reach 50.9 index points in April. This is more or less in line with the level recorded in February and above the average recorded during the first three months of the year.

The RMB/BER Business Confidence Index (BCI) jumped by 11 points from 34 in the fourth quarter of 2017 to 45 in the first quarter of 2018. An increase of such magnitude is rare: since 1975, the BCI rose by 11 points or more on only 15 occasions. If sustained, the first quarter rise implies a much-improved economic growth performance this year and next, relative to 2017’s 1.3% GDP expansion.

The FNB/BER Consumer Confidence Index (CCI) skyrocketed to an all-time high of +26 in the first quarter of 2018. The latest reading surpassed the previous record high of+23 index points reached in the first quarter of 2007. The dramatic increase signals a substantial improvement in consumers' willingness to spend. The extraordinary improvement in consumer sentiment can largely be ascribed to the change in the country’s leadership. There is a risk that the CCI overshot during the first quarter on the back of the positive sentiment, implying that there could be a negative correction during the second quarter.

Economic indicators

Key indicators

Fri May 25 2018 05:15:35

Rand-Dollar

12.4343

0.11%

Rand-Pound

16.6285

0.08%

Rand-Euro

14.5578

0.00%

Gold

1302.20

0.42%

Platinum

909.69

-0.00%

Brent Crude EOD

79.70

0.00%

R186

8.45

-5bps

R207

7.25

-3bps

Share indices (Previous day's close)

Last updated: Thu May 24 2018 09:52:45

JSE all-share

57043

-1.86%

JSE Top 40

50600

-1.93%

US S&P 500

2733

0.32 %

German Dax

12977

-1.47%

Japan Nikkei

22690

-1.18%

Please note

BER MORNING BRIEFING 31 MAY 2018

The macro economy, confidence and the land issue – Can the Cyril Spring endure?
31 May 2018, Stellenbosch.
For more information and to register click here

ECONOMIST INTERNSHIP PROGRAMME

The BER at Stellenbosch University, the South African Reserve Bank and Absa Bank Limited wish to announce the commencement of recruitment for the 2019 economist internship programme at the BER.
For more information, click here.

Recent releases

As expected, the MPC kept the repo policy interest rate unchanged at 6.50% (prime rate at 10.00%)....Get it here

Retail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a monthly basis in March, both the retail and wholesale sectors contracted during the first quarter. This adds to weak mining and manufacturing data. On the international front, activity data out of China and Japan also disappointed, providing further evidence of a marginal slowdown in global growth during 2018Q1. ...Get it here

Monthly survey of leading South African economists who forecast key macroeconomic variables....Get it here

Last week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased fears that the Federal Reserve (Fed) may be more aggressive with future policy interest rate hikes. Meanwhile, the domestic economy is set up for a disappointing growth rate in the first quarter, as both manufacturing and mining output fell in this period. Read more below. In other global news, the Bank of England (BoE) held its policy interest rate unchanged. The dovish sentiment signals that UK interest rates could remain at current levels a bit longer. Besides this, China recorded a trade surplus in April, compared to a deficit in March. Importantly, the surplus with the US widened despite selected tariff hikes by the US....Get it here

The domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an improvement in the trade balance at the end of the first quarter. In the international section, the focus is on the latest job figures from the US while PMI data for the major economies is also discussed. For the Eurozone, US and China, PMI-numbers registered levels above the neutral 50-point mark in April. This indicates that world growth retained its momentum at the start of the second quarter. In the US, besides release of the jobs data, the Federal Reserve (Fed) made no change to its policy interest rate, but confirmed that more hikes will follow. Meanwhile, in financial markets the US dollar continued to strengthen against major currencies and the rand, thereby also contributing to lower commodity prices. ...Get it here

Comprehensive economic statistics handbook. The latest South African and international economic data is presented in tables and graphs. Sectoral trends are also displayed....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Fact sheet of key monthly economic data and financial market indicators. The release accompanies the BER's economic forecast report, Economic Prospects....Get it here

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) erased the losses sustained in March and edged back above the neutral 50-point mark in April. The index rose by 4 points to reach 50.9 index points in April. This is more or less in line with the level recorded in February and above the average recorded during the first three months of the year. ...Get it here

Medium-term prospects for the SA economy have improved. Mostly, this stems from notably less concern about domestic politics and the policy environment....Get it here

Forecast publications

Medium-term prospects for the SA economy have improved. Mostly, this stems from notably less concern about domestic politics and the policy environment....Get it here

Global growth moved from strength to strength in 2017, with activity picking up in most country groupings. However, amidst political infighting and policy uncertainty SA was in no position to take advantage of the upturn in global growth. Developments since the ANC elective conference in December 2017 have led to increased optimism that overall economic activity might surprise on the upside going forward....Get it here

Global growth moved from strength to strength in 2017, with activity picking up in most country groupings. However, amidst political infighting and policy uncertainty SA was in no position to take advantage of the upturn in global growth. Developments since the ANC elective conference in December 2017 have led to increased optimism that overall economic activity might surprise on the upside going forward....Get it here

Excel sheets summarising the forecasts published in the latest issues of Economic Prospects (2-year quarterly forecast) and Economic Outlook (6-year annual forecast). Where possible, the forecast sheets have been updated with the latest available information.

...Get it here

Excel sheets summarising the forecasts published in the latest issues of Economic Prospects (2-year quarterly forecast) and Economic Outlook (6-year annual forecast). Where possible, the forecast sheets have been updated with the latest available information.

...Get it here

Given the lack of visibility on politics and the recent negative experience, we have stuck to a conservative medium-term real GDP growth outlook of only 1.6%....Get it here

Snapshot

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Graphs of the latest monthly and quarterly South African economic and financial data. The focus is on the essential indicators to give the reader a quick overview of general economic conditions....Get it here

Weekly

Retail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a monthly basis in March, both the retail and wholesale sectors contracted during the first quarter. This adds to weak mining and manufacturing data. On the international front, activity data out of China and Japan also disappointed, providing further evidence of a marginal slowdown in global growth during 2018Q1. ...Get it here

Last week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased fears that the Federal Reserve (Fed) may be more aggressive with future policy interest rate hikes. Meanwhile, the domestic economy is set up for a disappointing growth rate in the first quarter, as both manufacturing and mining output fell in this period. Read more below. In other global news, the Bank of England (BoE) held its policy interest rate unchanged. The dovish sentiment signals that UK interest rates could remain at current levels a bit longer. Besides this, China recorded a trade surplus in April, compared to a deficit in March. Importantly, the surplus with the US widened despite selected tariff hikes by the US....Get it here

The domestic economy started the second quarter on a healthy foot, as indicated by an improvement in the Absa Purchasing Managers’ Index (PMI) and higher new vehicles sales in April. Furthermore, an increase in mineral exports to Asia contributed to an improvement in the trade balance at the end of the first quarter. In the international section, the focus is on the latest job figures from the US while PMI data for the major economies is also discussed. For the Eurozone, US and China, PMI-numbers registered levels above the neutral 50-point mark in April. This indicates that world growth retained its momentum at the start of the second quarter. In the US, besides release of the jobs data, the Federal Reserve (Fed) made no change to its policy interest rate, but confirmed that more hikes will follow. Meanwhile, in financial markets the US dollar continued to strengthen against major currencies and the rand, thereby also contributing to lower commodity prices. ...Get it here

Domestic financial markets reacted positively to the lower-than-expected March inflation print....Get it here

Global geo-political concerns continued to dominate the news flow last week. Whereas the concerns about a trade war between the US and China eased after conciliatory remarks by the Chinese President, the situation in Syria continues to damage relations between the US and Russia. On the domestic front, manufacturing and mining data for February suggest that the contribution of these sectors to overall GDP growth in 2018Q1 will be limited, if not negative. This adds to the likelihood that quarterly GDP growth will slow significantly relative to the robust 2017Q4 print. Meanwhile, on the international front, higher US headline CPI in March confirmed the view of monetary authorities at the last Federal Open Market Committee (FOMC) meeting that underlying price pressure is building. ...Get it here

International news headlines were dominated by escalating trade tensions between the US and China last week. This also had a bearing on domestic financial markets. More on this in the markets section.The focus of the domestic section is on the Absa Purchasing Managers’ Index (PMI) for March. The PMI suggests that the manufacturing sector may have come under renewed pressure as slower export growth weighed on overall demand. Furthermore, other data showed that domestic new vehicles sales ticked up slightly in March, but that vehicle exports declined for a second month. In the international section, we unpack the latest PMI figures from the US, China and the Eurozone as well as the latest US job numbers (the nonfarm payroll report). The nonfarm payrolls disappointed and significantly undershot the consensus forecast. ...Get it here