The FNB/BER Civil Confidence Index gained 11 points to register a level of 52 in 2016Q3. Confidence was lifted by a notable improvement in overall profitability due to less keen tendering price competition and continued (albeit subdued) growth in construction activity.

The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) declined by 6.2 index points to reach 46.3 in August 2016. The magnitude of the drop was somewhat surprising after the PMI managed to remain above the neutral 50-point mark during the preceding five months. The decline was driven by a steep fall in the new sales orders index and a second straight monthly decline in the business activity index. Both of these indices are now well below the neutral 50-point mark

After falling for six consecutive quarters, the RMB/BER BCI rose by 10 points to 42 in the third quarter. There are several reasons why the third quarter outcome must be interpreted with care. Despite the bounce back in confidence, at 42 points, the BCI remained in net negative terrain. Most respondents completed the questionnaire after the local elections, but before the onset of the most recent flare-up in political uncertainty due to, among other factors, renewed questions about the future of the Minister of Finance. While the rise in the BCI was widespread, the improvement in underlying business indicators was not. We would therefore not take the latest BCI results to mean the faster pace of growth in the second quarter was sustained in the third quarter.

Having edged up in 2016Q1, the FNB/BER Consumer Confidence Index (CCI) slumped back to -11 in 2016Q2. The second quarter decline and exceedingly low level of the FNB/BER CCI mirrors the deterioration in the RMB/BER business confidence index during 2016Q2. Given that inflation is set to accelerate further on the back of the drought-induced rise in domestic grain prices and sustained weak rand exchange rate, the purchasing power of most households will likely weaken further in coming months, weighing on consumer spending.

Economic indicators

Key indicators

Fri Sep 30 2016 11:58:04

Rand-Dollar

13.9098

-0.04%

Rand-Pound

18.0364

0.09%

Rand-Euro

15.5472

-0.53%

Gold

1326.79

0.38%

Platinum

1033.50

0.88%

Brent Crude EOD

49.81

1.14%

R186

8.70

5bps

R207

7.89

3bps

Share indices (Previous day's close)

Last updated: Fri Sep 30 2016 08:08:41

JSE all-share

52699

1.79 %

JSE Top 40

46095

1.90 %

US S&P 500

2151

-0.93%

German Dax

10406

-0.31%

Japan Nikkei

16694

1.39 %

Please note


Recent releases

The FNB/BER Civil Confidence Index gained 11 points to register a level of 52 in 2016Q3. Confidence was lifted by a notable improvement in overall profitability due to less keen tendering price competition and continued (albeit subdued) growth in construction activity....Get it here

The FNB/BER Civil Confidence Index gained 11 points to register a level of 52 in 2016Q3. Confidence was lifted by a notable improvement in overall profitability due to less keen tendering price competition and continued (albeit subdued) growth in construction activity. ...Get it here

In the domestic economy, the SA Reserve Bank (SARB) left the repurchase rate unchanged at 7% last Thursday. Contributing to the decision was annual headline inflation which moderated in August on the back of a 99c decline in the petrol price. The SARB also published its leading economic indicator for July on Tuesday, which indicated that the real economy was still losing momentum at the dawn of the third quarter....Get it here

An improvement in the inflation outlook ensured that the MPC kept the repo policy interest rate unchanged at 7% (prime rate at 10.5%) for the third consecutive interest rate meeting....Get it here

Average inflation expectations for 2017 declined from 6.2% in the second quarter to 6.0% in the third quarter of 2016. Both analysts and business people lowered their forecasts, while trade unions left their forecast unchanged....Get it here

Average inflation expectations for 2017 declined from 6.2% in the second quarter to 6.0% in the third quarter of 2016. Both analysts and business people lowered their forecasts, while trade unions left their forecast unchanged....Get it here

Manufacturing business confidence improved to reach 30 index points in the third quarter of 2016, up from 23 in the second quarter. At the current level, seven out of ten respondents remain unsatisfied with prevailing business conditions. Going forward, manufacturers anticipate an improvement in most of the underlying activity indicators in the fourth quarter and see positive investment growth over the next year....Get it here

The Manufacturing Survey (Text Only) document is a shorter version of the Manufacturing Survey report and does not contain actual or historical survey data. Manufacturing business confidence improved to reach 30 index points in the third quarter of 2016, up from 23 in the second quarter. At the current level, seven out of ten respondents remain unsatisfied with prevailing business conditions. Going forward, manufacturers anticipate an improvement in most of the underlying activity indicators in the fourth quarter and see positive investment growth over the next year....Get it here

The 2016Q3 BER Retail Survey indicates that business confidence among retailers recovered handsomely after a sharp fall in 2016Q2. However, there were mixed results for the various subcategories. In all, subdued growth in consumers’ real disposable income and low levels of consumer confidence should continue to weigh on retail sales growth (and consumer spending in general) over coming quarters....Get it here

The Retail Survey (Text Only) document is a shorter version of the Retail Survey report and does not contain actual or historical survey data. The 2016Q3 BER Retail Survey indicates that business confidence among retailers recovered handsomely after a sharp fall in 2016Q2. However, there were mixed results for the various subcategories. In all, subdued growth in consumers’ real disposable income and low levels of consumer confidence should continue to weigh on retail sales growth (and consumer spending in general) over coming quarters....Get it here

Forecast publications

Both global and domestic dynamics suggest that SA GDP growth will remain poor for the rest of 2016. GDP is expected to decline by 0.2% in 2016 versus the previous forecast for growth of 0.4%. There is a high probability of a technical recession in the second half of the year....Get it here

Both global and domestic dynamics suggest that SA GDP growth will remain poor for the rest of 2016. GDP is expected to decline by 0.2% in 2016 versus the previous forecast for growth of 0.4%. There is a high probability of a technical recession in the second half of the year....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 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

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

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

In the domestic economy, the SA Reserve Bank (SARB) left the repurchase rate unchanged at 7% last Thursday. Contributing to the decision was annual headline inflation which moderated in August on the back of a 99c decline in the petrol price. The SARB also published its leading economic indicator for July on Tuesday, which indicated that the real economy was still losing momentum at the dawn of the third quarter....Get it here

Domestic economic news last week supported our view that the SA Reserve Bank (SARB) will leave the repurchase rate unchanged at 7% this week. Lower retail sales indicate that consumers are still under pressure, while an improvement in the current account deficit reduces the need for SA to compete for international funding. On the international front, a range of economic data from the US was below market expectations, reducing the risk that the Federal Reserve (Fed) might hike its policy interest rate this week. Last week’s interest rate decision by the Monetary Policy Committee (MPC) of the Bank of England (BoE) is also discussed. The Markets section focuses on fluctuations in the dollar, the slight improvement in the rand and the low oil price. ...Get it here

On the domestic front, GDP growth rebounded from a contraction in the first quarter and came out better than expected in 2016Q2. Looking forward, the robust 10-point improvement in the RMB/BER Business Confidence Index (BCI) for Q3 suggests that the solid Q2 growth momentum may be sustained in the second half of 2016. However, the broad-based improvement in confidence was not accompanied by uniform improvements in underlying activity measures. Indeed, the first official data available for Q3 indicates that GDP growth could slow sharply – see domestic section. The outcome of the European Central Bank’s (ECB) monetary policy meeting is unpacked in the international section. We also report on the July UK industrial production, as it reflected the first full month after the June Brexit vote, and US services data which disappointed....Get it here

On the domestic front, a sharp decline in the Barclays Purchasing Managers’ index (PMI) suggests that conditions in the manufacturing sector deteriorated somewhat during August. Additionally, low consumer confidence and rising prices continue to weigh on the new vehicle market. We unpack the PMI results, new vehicle sales figures and the July trade statistics in the domestic section. In international news, US job growth disappointed in August, reducing the probability of a September US interest rate hike. PMI releases from China and the UK show that economic activity in these regions expanded during August....Get it here

In domestic news, consumer price inflation moderated by more than expected in July, while producer prices increased at a faster pace. The inflation numbers, together with the implications for monetary policy, are discussed in the domestic section. On the international front, comments made by US Federal Reserve (Fed) chair Janet Yellen suggest that a US interest rate hike before year-end is back on the cards. Additionally, we reflect on economic activity in the US and the Eurozone (EZ) as measured by the preliminary Purchasing Managers’ Index (PMI) readings for August....Get it here

On the domestic front, data released by Statistics South Africa (Stats SA) showed that the trade sector expanded during 2016Q2 despite monthly declines in both retail and wholesale sales in June. Together with the positive mining and manufacturing data for the second quarter, the better performance of the trade sector should boost Q2 GDP growth. For more detail, see the domestic section. In international news, the minutes from the US Federal Reserve’s (Fed) July meeting confirm the view that US interest rates could remain unchanged until at least December. This view was further supported by a subdued July inflation print. The Fed minutes, together with inflation prints from the US and the Eurozone, are discussed in the international section....Get it here