An improvement in overall profitability saw the FNB/BER Civil Confidence Index edge higher to 42 points in 2015Q4, from 39 in 2015Q3. Nonetheless, the current level of confidence still suggests that close to 60% of civil contractors are dissatisfied with prevailing business conditions amid restrained growth in construction activity

The South African manufacturing sector started 2016 on the back foot as the seasonally adjusted Barclays Purchasing Managers’ Index (PMI) fell by 2 index points to 43.5 in January. This is more than 5 index points below the average level recorded in 2015. Unfortunately, purchasing managers do not foresee an improvement over the near term as the index measuring expected business conditions in six months’ time declined to 39.4 – the lowest level in almost 7 years. The PMI leading indicator also fell further below 1. This means that inventories continue to outstrip sales orders, which does not bode well for production growth going forward.

After falling from 43 to 38 in the third quarter, the RMB/BER Business Confidence Index (BCI) fell by a further two points to 36 in the final quarter of 2015. Over the past year, business confidence has dropped by a full 15 points and is now at its lowest level in five years. The latest BCI result suggests that real GDP growth moderated further in the fourth quarter compared with the same period in 2014.

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

Share indices (Previous day's close)

Last updated: Wed Feb 10 2016 08:09:29

JSE all-share

48345

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JSE Top 40

42975

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US S&P 500

1852

-0.07 %

German Dax

8879

-1.11 %

Japan Nikkei

16085

-5.40 %

Please note


Recent releases

Last week saw further evidence of the weakness in the domestic economy as data showed that new vehicle sales contracted sharply in January. In response to worsening domestic conditions, the World Bank joined other institutions in downgrading its growth outlook for South Africa. More detail in the domestic section. In international news, softer than expected US data has pushed out expectations of further rate hikes, while UK monetary policy is also projected to remain highly accommodative for longer than previously expected. See the international section for more details....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

Domestic headlines were dominated last week by the decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) to raise its main policy rate by 50 basis points to 6.75%. While the deterioration in the domestic inflation outlook necessitated the move, the hike in interest rates will likely weigh on an already struggling economy. More on this and other domestic data developments in the Domestic section. In international news, the Bank of Japan (BoJ) joined the European Central Bank (ECB) in cutting interest rates to below zero in an attempt to stimulate the Japanese economy. Diverging monetary policy stances for the world’s largest economies will likely result in further financial market volatility in months to come. For more, see the International section....Get it here

The South African manufacturing sector started 2016 on the back foot as the seasonally adjusted Barclays Purchasing Managers’ Index (PMI) fell by 2 index points to 43.5 in January. This is more than 5 index points below the average level recorded in 2015. Unfortunately, purchasing managers do not foresee an improvement over the near term as the index measuring expected business conditions in six months’ time declined to 39.4 – the lowest level in almost 7 years. The PMI leading indicator also fell further below 1. This means that inventories continue to outstrip sales orders, which does not bode well for production growth going forward....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 Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) raised the repo policy rate by 50bps to 6.75%, in line with the BER’s expectation and the financial market consensus. As a result, the prime lending rate will increase to 10.25%. Since the policy tightening cycle started in January 2014, the repo rate has been raised by a total of 175bps....Get it here

Domestic financial markets remained at the mercy of global developments last week, while the latest SA consumer inflation data was also in focus. Though inflation turned out lower in 2015 compared to 2014, the tide in price level growth is turning fast. In the domestic section we discuss the latest inflation data, with a focus on the drought and its impact on food prices. Meanwhile, the growth in retail sales outperformed the market expectation in November, while wholesale sales also gained some ground. The international section focusses on the Chinese economy, which continues to lose momentum. We briefly look at the decision of the European Central Bank (ECB) to keep its policy rates unchanged, and summarise the latest flash PMIs from the US, EZ (Eurozone) and Japan. Last Wednesday equity markets were down on news of a lower global growth outlook by the IMF. These developments are discussed in the markets section....Get it here

The percentage of respondents answering “satisfied” to the question “are prevailing business conditions satisfactory or unsatisfactory?” is taken as the indicator of financial sector confidence. The EY Financial Services Index (FSI) reflects the unweighted average confidence of four segments of financial services, namely retail banking, investment banking, asset management and life insurance.

Theoretically, the index can vary between a maximum of 100 (which indicates that all respondents were satisfied with prevailing business conditions) and a minimum of zero (indicating that all respondents were unsatisfied). However, over the period 2002 to 2014 the index varied between 40 and 100. The long term average is 76 and could therefore be regarded as the neutral level.

For more information on how the BER conducts the Financial Services Survey, click here.

...Get it here

The percentage of respondents answering “satisfied” to the question “are prevailing business conditions satisfactory or unsatisfactory?” is taken as the indicator of financial sector confidence. The EY Financial Services Index (FSI) reflects the unweighted average confidence of four segments of financial services, namely retail banking, investment banking, asset management and life insurance.

Theoretically, the index can vary between a maximum of 100 (which indicates that all respondents were satisfied with prevailing business conditions) and a minimum of zero (indicating that all respondents were unsatisfied). However, over the period 2002 to 2014 the index varied between 40 and 100. The long term average is 76 and could therefore be regarded as the neutral level.

For more information on how the BER conducts the Financial Services Survey, click here.

...Get it here

Forecast publications

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

As has been the case in many parts of the world, we are again confronted with the fact that the previous GDP growth outlook for South Africa now seems too optimistic. Sustained lower export commodity prices, spreading drought conditions and electricity bottlenecks suggest that the production side of the economy should remain under pressure in the foreseeable future. Furthermore, we remain concerned about the outlook for consumer spending amid subdued employment growth, a rising inflation profile and possible further monetary and fiscal policy tightening. Against this backdrop, the GDP growth forecast for 2015 and 2016 has been downgraded....Get it here

As has been the case in many parts of the world, we are again confronted with the fact that the previous GDP growth outlook for South Africa now seems too optimistic. Sustained lower export commodity prices, spreading drought conditions and electricity bottlenecks suggest that the production side of the economy should remain under pressure in the foreseeable future. Furthermore, we remain concerned about the outlook for consumer spending amid subdued employment growth, a rising inflation profile and possible further monetary and fiscal policy tightening. Against this backdrop, the GDP growth forecast for 2015 and 2016 has been downgraded....Get it here

The outlook for the South African economy over the medium term is not very inspiring, despite some improvement from 2017 onwards. Real economic growth is only projected to breach the 3% level by 2020, averaging 2.6% for the 6 years 2015 – 2020. This follows primarily from the continued restraining impact of electricity supply, low business confidence and consequently private sector fixed investment and (deficit and debt) constrained government expenditure levels. Under these conditions employment growth is likely to be quite poor, implying pedestrian growth in consumer spending....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

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

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

Last week saw further evidence of the weakness in the domestic economy as data showed that new vehicle sales contracted sharply in January. In response to worsening domestic conditions, the World Bank joined other institutions in downgrading its growth outlook for South Africa. More detail in the domestic section. In international news, softer than expected US data has pushed out expectations of further rate hikes, while UK monetary policy is also projected to remain highly accommodative for longer than previously expected. See the international section for more details....Get it here

Domestic headlines were dominated last week by the decision by the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) to raise its main policy rate by 50 basis points to 6.75%. While the deterioration in the domestic inflation outlook necessitated the move, the hike in interest rates will likely weigh on an already struggling economy. More on this and other domestic data developments in the Domestic section. In international news, the Bank of Japan (BoJ) joined the European Central Bank (ECB) in cutting interest rates to below zero in an attempt to stimulate the Japanese economy. Diverging monetary policy stances for the world’s largest economies will likely result in further financial market volatility in months to come. For more, see the International section....Get it here

Domestic financial markets remained at the mercy of global developments last week, while the latest SA consumer inflation data was also in focus. Though inflation turned out lower in 2015 compared to 2014, the tide in price level growth is turning fast. In the domestic section we discuss the latest inflation data, with a focus on the drought and its impact on food prices. Meanwhile, the growth in retail sales outperformed the market expectation in November, while wholesale sales also gained some ground. The international section focusses on the Chinese economy, which continues to lose momentum. We briefly look at the decision of the European Central Bank (ECB) to keep its policy rates unchanged, and summarise the latest flash PMIs from the US, EZ (Eurozone) and Japan. Last Wednesday equity markets were down on news of a lower global growth outlook by the IMF. These developments are discussed in the markets section....Get it here

After a tough start to 2016, global financial markets were somewhat calmer for most of last week before renewed sharp stock market declines on Friday. On the domestic data front, the focus was on mining and manufacturing data for November. Mining output improved, partly on account of a base-effect recovery in the platinum sector and the weak rand. However, manufacturing output remained in negative territory due to a sharp contraction in metals and machinery production. The international section deals with the recent improvement in China’s trade balance, as exports gained on the back of a weaker yuan exchange rate. We also look at the latest monetary policy communication from key European central banks. Last Monday, the rand depreciated in a flash crash to an all-time low of R17.91/$. On Thursday, the price of Brent crude oil fell below the $30/barrel psychological benchmark for the first time in twelve years. These developments are discussed in the markets section....Get it here

The South African rand faced a tough start to 2016 and tumbled to an all-time low against the US dollar during the week. Besides persisting internal issues, increasing concerns about the slowdown of the Chinese economy and subsequent global financial market volatility weighed on the rand (see markets below). The weaker rand, coupled with the intensifying local drought and resulting need to import food commodities in the near term, will put additional pressure on inflation and the economy in 2016. Given the significant upward pressure on inflation stemming from the weak rand, it is likely that the South African Reserve Bank (SARB) will increase the repo rate by more than 25 basis points at its meeting at the end of the month. The international section reviews the latest Purchasing Managers’ Index (PMI) figures from across the globe. While the Eurozone ended 2015 stronger than expected, figures from the US and China disappointed....Get it here

Domestic financial markets were dominated by the shock announcement late on Wednesday that President Jacob Zuma “decided to remove Mr Nhlanhla Nene as minister of finance, ahead of his deployment to another strategic position”. With the rand exchange rate already facing a tough start to the week after the previous Friday’s credit rating calls by Fitch and S&P, the currency came under renewed pressure in the wake of the announcement. The currency plummeted to an all-time low against the dollar and continued to weaken through Friday’s trading session. The rand recovered this morning after a stunning about-turn on Sunday night. The presidency issued a statement, saying that Nene’s replacement (David van Rooyen) would (after four days on the job) be moved to the portfolio of Minister of Local Government and Traditional Affairs. Pravin Gordhan will move back to his former position as minister of finance....Get it here