After rising marginally to 42 in 2015Q4, the FNB/BER Civil Confidence Index fell by 14 points in 2016Q1 to 28. This is the lowest level for the index since 2011Q4. The results from the civil contractor survey suggests that construction activity slowed noticeably during the quarter along with a marked uptick in tendering price competition.

The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) continued its recent upward move and reached 54.9 index points in April. The PMI rose from 50.5 in March and is now more than 10 points above the level recorded just three months ago. The new sales orders index rose for a third straight month and the improvement in demand filtered through to higher output. The business activity index increased above the neutral 50-point mark after signalling a slowdown for eight straight months. Some respondents noted that import substitution led to an improvement in domestic demand, while exports also rose.

The RMB/BER BCI was unchanged at 36 in the first quarter of 2016. While sentiment recovered in four of the five sectors during the quarter, improvements were small. Also, confidence among manufacturers collapsed to levels last seen during the 2009 recession. The poor, and in some cases deteriorating underlying activity indicators, are worrying signs. This might well point to further weakness in GDP growth ahead.

After recovering in 2015Q3, the FNB/BER Consumer Confidence Index (CCI) collapsed back to close to multi-year lows in 2015Q4. All three sub-indices lost some ground as a myriad of adverse economic forces continue to hammer the consumer. The latest CCI reading correlates with the 2015Q4 EY/BER Retail Survey results, which signalled a significant slowdown and generally disappointing retail sales growth in the run-up to Christmas 2015.

Economic indicators

Key indicators

Mon May 30 2016 06:44:26

Rand-Dollar

15.7837

0.65%

Rand-Pound

23.0792

0.79%

Rand-Euro

17.5264

0.66%

Gold

1202.96

-0.50%

Platinum

970.50

-0.46%

Brent Crude EOD

49.69

0.00%

R186

9.38

0bps

R207

8.73

0bps

Share indices (Previous day's close)

Last updated: Fri May 27 2016 08:19:31

JSE all-share

53921

0.37 %

JSE Top 40

47836

0.23 %

US S&P 500

2090

-0.02 %

German Dax

10273

0.66 %

Japan Nikkei

16772

0.09 %

BER Director / BEO Direkteur

The Bureau for Economic Research (BER) at Stellenbosch University is pleased to announce that Professor Johann Kirsten has been appointed as the new Director of the BER. Prof Kirsten will assume his duties on 1 August 2016. He succeeds Prof Ben Smit who retired as Director at the end of December 2015. Click here for the press release.

Die Buro vir Ekonomiese Ondersoek (BEO) aan die Universiteit Stellenbosch kondig graag aan dat Professor Johann Kirsten as die nuwe Direkteur van die BEO aangestel is. Prof Kirsten neem die leisels op 1 Augustus 2016 oor. Hy volg prof Ben Smit op. Prof Smit het einde-Desember 2015 as Direkteur afgetree. Klik hier vir die nuusvrystelling.

Recent releases

Last week, South African consumers received some much needed relief when the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged despite upside risks to their inflation outlook. The MPC’s decision, together with the latest inflation, retail and wholesale sales figures are unpacked in the domestic section. Internationally, steady US inflation data was followed by surprisingly hawkish minutes from the Federal Open Market Committee (FOMC) meeting in April – both strengthening the case for interest rate hikes later this year. In other news, the Eurozone (EZ) slipped back into deflation and Japan’s first quarter economic growth was better than expected....Get it here

The MPC decided to keep the repo policy interest rate unchanged at 7%. Depending on the data and financial market trends in coming weeks and months, the MPC left the door open for a further hike(s) later in 2016....Get it here

Last week’s domestic data showed that labour market activity remained constrained by poor economic growth in the first quarter of 2016. With the jobless rate at an eight-year high, the National Development Plan’s (NDP) target of a 14% unemployment rate by 2020 seems highly unlikely. Disappointing mining and manufacturing data for March also paint a picture of an economy that remains under pressure. Internationally, strong US retail sales surprised markets and supported the dollar. In contrast, disappointing economic data from China added to concerns about the recovery of the world’s second largest economy. In other news, an uptick in Germany’s first quarter growth was not enough to prop up the Eurozone’s economy. In financial markets, the rand came under renewed selling pressure last week....Get it here

The objective of the current research note is to analyse the key features of the post-2009 South African (SA) business cycle, i.e. both the expansion phase from 2009 to 2013 and the ensuing economic downturn to date. The analysis is conducted in the context of SA’s historic business cycles from the mid-1970s....Get it here

The Bureau for Economic Research (BER) at Stellenbosch University is pleased to announce that Professor Johann Kirsten has been appointed as the new Director of the BER. Prof Kirsten will assume his duties on 1 August 2016. He succeeds Prof Ben Smit who retired as Director at the end of December 2015....Get it here

In a surprise move, Moody’s reaffirmed SA’s sovereign credit rating at two notches above junk late on Friday. However, despite the agency’s relatively upbeat statement, the ratings outlook remains negative. S&P is widely expected to downgrade SA’s (foreign currency) rating to sub-investment status over the coming months. Data releases were restricted to new vehicle sales and electricity production figures in what was otherwise a relatively quiet week from a domestic data perspective. Both these indicators confirmed the view that domestic economic growth remains lacklustre. In international news, markets were focused on the release of non-farm payroll data from the US for most of last week. The data showed that the US economy added fewer jobs than expected in April, reducing the probability of an US interest rate hike in June. More on this and the latest Chinese trade statistics in the international section....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

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

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

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

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

After a tumultuous start to 2016, global growth appears to have stabilised. However, developed countries continue to struggle to stimulate domestic demand, while emerging markets appear to be at the mercy of a slowing Chinese economy. This is also true of South Africa where early indications are that GDP growth is likely to come under significant pressure in 2016....Get it here

After a tumultuous start to 2016, global growth appears to have stabilised. However, developed countries continue to struggle to stimulate domestic demand, while emerging markets appear to be at the mercy of a slowing Chinese economy. This is also true of South Africa where early indications are that GDP growth is likely to come under significant pressure in 2016....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

The outlook for the domestic economy over the medium term is one of a somewhat improved (from the current very poor conditions), but still unsatisfactory performance. Real GDP growth is expected to increase to the 2.5% to 3% level during 2015 to 2020. ...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

Starting January 2016, BER Snapshot is no longer freely available for non-BER clients, but is available to purchase for R49 per monthly issue....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

Last week, South African consumers received some much needed relief when the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged despite upside risks to their inflation outlook. The MPC’s decision, together with the latest inflation, retail and wholesale sales figures are unpacked in the domestic section. Internationally, steady US inflation data was followed by surprisingly hawkish minutes from the Federal Open Market Committee (FOMC) meeting in April – both strengthening the case for interest rate hikes later this year. In other news, the Eurozone (EZ) slipped back into deflation and Japan’s first quarter economic growth was better than expected....Get it here

Last week’s domestic data showed that labour market activity remained constrained by poor economic growth in the first quarter of 2016. With the jobless rate at an eight-year high, the National Development Plan’s (NDP) target of a 14% unemployment rate by 2020 seems highly unlikely. Disappointing mining and manufacturing data for March also paint a picture of an economy that remains under pressure. Internationally, strong US retail sales surprised markets and supported the dollar. In contrast, disappointing economic data from China added to concerns about the recovery of the world’s second largest economy. In other news, an uptick in Germany’s first quarter growth was not enough to prop up the Eurozone’s economy. In financial markets, the rand came under renewed selling pressure last week....Get it here

In a surprise move, Moody’s reaffirmed SA’s sovereign credit rating at two notches above junk late on Friday. However, despite the agency’s relatively upbeat statement, the ratings outlook remains negative. S&P is widely expected to downgrade SA’s (foreign currency) rating to sub-investment status over the coming months. Data releases were restricted to new vehicle sales and electricity production figures in what was otherwise a relatively quiet week from a domestic data perspective. Both these indicators confirmed the view that domestic economic growth remains lacklustre. In international news, markets were focused on the release of non-farm payroll data from the US for most of last week. The data showed that the US economy added fewer jobs than expected in April, reducing the probability of an US interest rate hike in June. More on this and the latest Chinese trade statistics in the international section....Get it here

Last week saw the release of global GDP data for the first quarter. The figures continued to paint a mixed picture of economic fortunes. While growth in the Eurozone accelerated, in the UK and the US growth moderated. In contrast, domestic data was broadly upbeat. Not only did SA record a trade surplus in March (which bodes well for the current account deficit), but the Barclays Purchasing Managers’ Index (PMI) rose to 54.5 points. The PMI data signals a more sustained improvement in the manufacturing sector....Get it here

Last week was relatively quiet on the domestic front, with the March consumer price index (CPI) being the only notable data release. CPI inflation slowed in March, but remained above the 6% target. A reacceleration in price pressures is expected during the remainder of the year – more in the domestic section. In the international section we focus on the preliminary Purchasing Managers’ Index (PMI) figures from Europe and the US that give a first indication of economic growth in 2016Q2. Signs that the US economy could be slowing may mean that the US Federal Reserve (Fed) will keep the policy interest rate on hold for longer. This week’s Federal Open Market Committee (FOMC) meeting, as well as the 2016Q1 US GDP release, are therefore keenly awaited by markets. ...Get it here

Data releases last week showed that slowing Chinese growth continues to weigh on the domestic economy. The latest SA mining production figures confirm that the sector continues to struggle in the face of waning demand and low commodity prices. In contrast, retail and wholesale sales surprised on the upside, suggesting that there is still some life in the trade sector. In international news, data released by China’s National Bureau of Statistics showed that the country’s GDP growth moderated to its lowest level since the financial crisis during 2016Q1. However, other data releases suggest that the economy has stabilised after a rather tumultuous start to 2016. In the US, muted growth in retail sales and subdued inflation confirm that further monetary tightening might be postponed. ...Get it here