Following a cumulative 24 index point rise during 2016Q2 and 2016Q3, the FNB/BER Civil Confidence Index shed 17 points to register a level of 35 in 2016Q4. A number of factors contributed to the drop in confidence, including lower activity growth, keener competition and, consequently, also weaker profitability.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 50.9 in January 2017, up from 46.7 in December 2016. This was the first time since July 2016 that the index edged above the neutral 50-point mark, suggesting that the manufacturing sector started the year on a relatively solid footing. The rise in the headline PMI was supported by four of the five underlying subcomponents increasing in January compared to December 2016.

After jumping by 10 index points to 42 in the third quarter, the RMB/BER business confidence index (BCI) declined to 38 in the final quarter of the year. After considerable increases in the third quarter, confidence dropped back in the motor and retail trade sectors in particular, and to a lesser extent in the wholesale trade. Sentiment among manufacturers remained unchanged at a still depressed level, while the building sector was the only sector that sustained an increase in its BCI. the results continue to point to a “muddle-through” scenario where growth, in all likelihood, continued to move broadly sideways at a low rate in the second half of the year.

After rebounding from -11 index points in 2016Q2 to -3 in 2016Q3, the FNB/BER Consumer Confidence Index (CCI) sagged back to -10 in 2016Q4. The deterioration in consumer sentiment during 2016Q4 came on the back of a reversal in the gains that were made during the third quarter for the two forward-looking sub-indices of the CCI.

Economic indicators

Key indicators

Mon Feb 27 2017 14:01:03

Rand-Dollar

12.9569

0.22%

Rand-Pound

16.0843

0.34%

Rand-Euro

13.7114

0.51%

Gold

1255.08

-0.07%

Platinum

1026.50

0.34%

Brent Crude EOD

55.94

-1.01%

R186

8.75

5bps

R207

7.79

5bps

Share indices (Previous day's close)

Last updated: Mon Feb 27 2017 08:30:01

JSE all-share

51610

-1.10%

JSE Top 40

44581

-1.16%

US S&P 500

2367

0.15 %

German Dax

11804

-1.20%

Japan Nikkei

19284

-0.45%

Please note

BER MORNING BRIEFING

The SA economy, ANC succession and global disruption: The new normal of uncertainty

Date: Friday 12 May 2017
Venue: Radisson Blu Hotel, Sandton

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Recent releases

The domestic economic calendar was dominated by the tabling of the National Budget by Minister of Finance Pravin Gordhan on Wednesday. While significant personal income tax (PIT) hikes should depress consumer spending, there may be some relief from lower inflation in 2017. Indeed, price increases at factory gates slowed more than expected in January (see the domestic section). In the international section we unpack the release of the Federal Reserve’s Open Market Committee’s (FOMC) February meeting minutes. Despite the statement that the policy interest rate may be hiked “fairly soon”, market expectations remained low for a rate hike at the Fed’s upcoming meeting in March. The section also reviews the latest Purchasing Managers’ Index (PMI) figures from the US, Eurozone and Japan. ...Get it here

As expected, the major Budget headlines concern the tax proposals as no significant new expenditure initiatives were outlined....Get it here

In the domestic section we review the latest employment, retail trade and inflation data from Statistics South Africa (Stats SA). The labour data showed that despite a quarterly dip in the unemployment rate in 2016Q4, annual job growth remained weak. Subdued employment growth makes Finance Minister Pravin Gordhan’s job to balance the books in Wednesday’s annual National Budget statement even more challenging. On the international front, the key economic event was the semi-annual testimony by US Federal Reserve (Fed) Chair Janet Yellen before the Senate Banking Committee. Although Yellen’s comments did not contain a lot of new information, it was interpreted as being slightly more hawkish on the US interest rate outlook. Higher-than-expected US inflation and more upbeat retail sales data released last week support the case for Fed rate hikes going forward. ...Get it here

Socio-political topics dominated the domestic agenda last week. As such, the current affairs section focuses on the new national minimum wage (NMW) announced by the deputy president, as well as the State of the Nation Address (SONA) by President Jacob Zuma. The domestic section touches on the mining and manufacturing data which is now complete for 2016Q4, and confirms a contraction in both sectors....Get it here

Domestic economic data released last week showed that the economy started the year off on a solid footing. The January Absa Purchasing Managers’ Index (PMI) moved above 50 for the first time since July 2016 while vehicles sales, also for January, posted its first annual expansion since 2015. On the international front, monetary policy meetings in the US and the UK yielded no change in interest rates for these countries. However, the expectation is that the US will continue with gradual monetary policy tightening later this year. Also in the US, non-farm payroll employment rose by more than expected in January. However, earnings growth disappointed. ...Get it here

The global and domestic economic environment is confronted by high levels of uncertainty. While this is not unique since the 2008/9 global crisis, the current uncertainty is largely on the political and policy front. This implies that a number of scenarios are possible over the forecast period....Get it here

The global and domestic economic environment is confronted by high levels of uncertainty. While this is not unique since the 2008/9 global crisis, the current uncertainty is largely on the political and policy front. This implies that a number of scenarios are possible over the forecast period....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

Forecast publications

The global and domestic economic environment is confronted by high levels of uncertainty. While this is not unique since the 2008/9 global crisis, the current uncertainty is largely on the political and policy front. This implies that a number of scenarios are possible over the forecast period....Get it here

The global and domestic economic environment is confronted by high levels of uncertainty. While this is not unique since the 2008/9 global crisis, the current uncertainty is largely on the political and policy front. This implies that a number of scenarios are possible over the forecast period....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

Our updated forecast is for average SA GDP growth of a modest 1.8% during 2016-21. The average is depressed by weak 2016 and 2017 numbers - growth of 2.4% is pencilled in for 2018-21. While still subdued, this is on par with the (modest) performance of 2010-15. ...Get it here

Our latest six-year forecast can be divided into two distinct periods. The short-term prospects for the economy are decidedly downbeat with global and (increasingly) domestic factors conspiring to depress growth to well below potential levels in 2016 (0.4%) and 2017 (1.3%). Over the medium term, GDP growth is forecast to recover to an average of 2.8% between 2019 and 2021. We modelled a risk scenario of multiple credit rating downgrades that results in a significant slowdown in foreign capital inflows from the second half of 2016. This environment sees the rand weakening to an average of R21/$ in 2017Q4, before recovering from early 2018....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

The domestic economic calendar was dominated by the tabling of the National Budget by Minister of Finance Pravin Gordhan on Wednesday. While significant personal income tax (PIT) hikes should depress consumer spending, there may be some relief from lower inflation in 2017. Indeed, price increases at factory gates slowed more than expected in January (see the domestic section). In the international section we unpack the release of the Federal Reserve’s Open Market Committee’s (FOMC) February meeting minutes. Despite the statement that the policy interest rate may be hiked “fairly soon”, market expectations remained low for a rate hike at the Fed’s upcoming meeting in March. The section also reviews the latest Purchasing Managers’ Index (PMI) figures from the US, Eurozone and Japan. ...Get it here

In the domestic section we review the latest employment, retail trade and inflation data from Statistics South Africa (Stats SA). The labour data showed that despite a quarterly dip in the unemployment rate in 2016Q4, annual job growth remained weak. Subdued employment growth makes Finance Minister Pravin Gordhan’s job to balance the books in Wednesday’s annual National Budget statement even more challenging. On the international front, the key economic event was the semi-annual testimony by US Federal Reserve (Fed) Chair Janet Yellen before the Senate Banking Committee. Although Yellen’s comments did not contain a lot of new information, it was interpreted as being slightly more hawkish on the US interest rate outlook. Higher-than-expected US inflation and more upbeat retail sales data released last week support the case for Fed rate hikes going forward. ...Get it here

Socio-political topics dominated the domestic agenda last week. As such, the current affairs section focuses on the new national minimum wage (NMW) announced by the deputy president, as well as the State of the Nation Address (SONA) by President Jacob Zuma. The domestic section touches on the mining and manufacturing data which is now complete for 2016Q4, and confirms a contraction in both sectors....Get it here

Domestic economic data released last week showed that the economy started the year off on a solid footing. The January Absa Purchasing Managers’ Index (PMI) moved above 50 for the first time since July 2016 while vehicles sales, also for January, posted its first annual expansion since 2015. On the international front, monetary policy meetings in the US and the UK yielded no change in interest rates for these countries. However, the expectation is that the US will continue with gradual monetary policy tightening later this year. Also in the US, non-farm payroll employment rose by more than expected in January. However, earnings growth disappointed. ...Get it here

Domestic inflationary pressure may be stickier than the consensus expectations, as seen from the inflation forecast of the South African Reserve Bank (SARB) and the latest producer inflation figures (PPI) reported by Statistics South Africa (Stats SA). In this light, the domestic section focuses on the latest Monetary Policy Committee (MPC) interest rate decision and the PPI figure for December....Get it here

On the domestic front, consumer inflation for December came out slightly higher than predicted. However, we expect the SA Reserve Bank to retain a view of moderating inflation going forward and is therefore likely to keep the repo policy interest rate on hold tomorrow. In the SA real economy, last week’s data releases were mixed. Retail sales improved notably in November, while mining output contracted and consumer confidence declined in 2016Q4....Get it here