The FNB/BER Civil Confidence Index gained 13 points to register a level of 41 in 2016Q2. This returns the index to more or less the same level as registered in 2015Q4. Despite the higher confidence, the current level of the index indicates that close to 60% of respondents are dissatisfied with prevailing business conditions.

The seasonally adjusted Barclays Purchasing Managers’ Index (PMI) rose to 53.7 index points in June, up from 51.9 in May. The PMI has now remained above the neutral 50-point mark for four consecutive months. This is an encouraging sign that conditions in the factory sector may be improving after a lacklustre 2015 and slow start to 2016.

After remaining unchanged at 36 in the first quarter, the RMB/BER Business Confidence Index (BCI) fell to 32 in the second quarter. Confidence is now at its lowest level since the fourth quarter of 2009, when the index was 28. Regarding the five sectors making up the BCI, confidence fell sharply among retailers. Looking forward to the second quarter, the latest RMB/BER BCI survey results are worrying, with the already weak and all-important trade sector showing few, if any, signs of improvement.

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

Sun Jul 31 2016 01:25:28

Rand-Dollar

13.8858

0.32%

Rand-Pound

18.3763

0.53%

Rand-Euro

15.5074

0.03%

Gold

1350.67

0.12%

Platinum

1150.50

0.31%

Brent Crude EOD

42.61

0.00%

R186

8.64

0bps

R207

7.95

0bps

Share indices (Previous day's close)

Last updated: Fri Jul 29 2016 08:21:03

JSE all-share

53282

-0.90%

JSE Top 40

46390

-1.03%

US S&P 500

2170

0.16 %

German Dax

10275

-0.43%

Japan Nikkei

16477

-1.13%

Please note

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Recent releases

Domestic economic news last week was dominated by the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision came after June consumer inflation (CPI) data was in line with expectations. On the international front, the latest economic forecast by the International Monetary Fund (IMF) suggests that headwinds facing the global economy are rising. This is particularly true of developments surrounding Brexit, with prospects for Britain downbeat. ...Get it here

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

In a unanimous decision, the MPC decided to keep the repo policy interest rate unchanged at 7% (prime rate at 10.5%)....Get it here

The 2016 to 2018 headline CPI inflation expectations of analysts, business people and trade unions were virtually unchanged, compared to the first quarter of 2016. The second quarter results confirm those of the first quarter, namely that average inflation expectations remained anchored, albeit at the top of the 3% to 6% target range....Get it here

The 2016 to 2018 headline CPI inflation expectations of analysts, business people and trade unions were virtually unchanged, compared to the first quarter of 2016. The second quarter results confirm those of the first quarter, namely that average inflation expectations remained anchored, albeit at the top of the 3% to 6% target range....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 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 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 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 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 EY Financial Sector Confidence Index (EY FSI) increased from 51 in the first quarter to 59 in the second quarter of 2016 , . Despite the increase confidence remains relatively low given that it is somewhat below the long-term average of 76....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

Domestic economic news last week was dominated by the SA Reserve Bank (SARB) interest rate announcement on Thursday. As expected, the repurchase (repo) rate remained unchanged. The decision came after June consumer inflation (CPI) data was in line with expectations. On the international front, the latest economic forecast by the International Monetary Fund (IMF) suggests that headwinds facing the global economy are rising. This is particularly true of developments surrounding Brexit, with prospects for Britain downbeat. ...Get it here

The coup attempt in Turkey on Friday, on the back of another terror attack in France late Thursday, resulted in an increase in uncertainty late last week. However, with the situation stabilised, market sentiment recovered on Monday with Asian and European markets on a relatively steady footing. Domestic data released last week was very upbeat. In the production sector of the economy, both mining and manufacturing production registered positive growth rates in May. Similarly, in the services sector, wholesale and retail sales were higher. The domestic section unpacks the implications for 2016Q2 GDP growth. Internationally, the Monetary Policy Committee (MPC) of the Bank of England (BoE) decided by a strong vote to keep its policy interest rate unchanged. Meanwhile, quarterly economic growth accelerated in China during the second quarter....Get it here

Last week, a number of economic gauges indicated that the SA economy is under pressure. In this regard, the domestic section summarises the slump in Q2 consumer confidence, the lower employment numbers in 2016Q1 and the downward revision in the IMF’s outlook of economic growth in 2016. Besides these domestic issues, more risks might be coming from one of SA’s neighbours. In current affairs, we discuss the latest economic implosion and resultant social unrest in Zimbabwe. Internationally, the latest minutes of the Federal Open Market Committee (FOMC) revealed a cautious attitude about the US economic outlook among members during their June policy meeting. This should be eased somewhat given the positive job numbers released for June. Financial markets were marked by a continued weakening of the pound, which shielded the FTSE100 from any further declines. ...Get it here

Last week, markets continued to digest the implications of the Brexit vote. The hope that central banks will step in to contain the fallout of the UK’s exit from the EU has helped to stabilise global markets after the major sell-off on 24 and 25 June. The rand strengthened against most major currencies over the week on the back of calmer markets and better-than-expected trade data. The trade data, as well as the latest producer price inflation and Barclays Purchasing Managers’ Index (PMI) figures, are discussed in the domestic section....Get it here

The fallout from the UK’s decision to leave the European Union (EU) dominated the newswires last week. Initial reactions were strongly negative, but it will take some time for markets to fully digest the implications of the decision. We unpack the market reaction as well as some of the possible repercussions of the vote below. The domestic data calendar was relatively light, with consumer price inflation the only significant official release. Additionally, we unpack results from the latest EY/BER Retail Survey. Results suggest that both retailers and wholesalers continue to struggle in the face of rising input costs and weak demand. On the international front, we discuss the June flash Purchasing Managers’ Index (PMI) results for the US and the Eurozone (EZ)....Get it here

Regarding the domestic economy, the South African Reserve Bank (SARB) reported that the current account (CA) deficit widened in 2016Q1 on the back of higher dividend payments to foreign shareholders, coupled with lower dividend receipts from foreign companies. Looking at the second quarter, the domestic trade sector posted negative short-run results as both real retail and wholesale sales contracted on a monthly basis during April. Monetary policy decisions by major central banks dominated the international economic scene last week. Interest rates were held steady in the US, the UK and Japan as central banks expected inflation to remain below their respective targets while economic growth is still at risk. However, last week equity markets started to pay more attention to the upcoming Brexit poll, as they shed some value despite the dovish monetary policy announcements....Get it here