After gaining 4 points in 2017Q4, the FNB/BER Civil Confidence Index fell to a record low of 12 in 2018Q1. The current index level means that close to ninety per cent of respondents are dissatisfied with prevailing business conditions.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) dipped back to just below the neutral 50-point mark in May. The index declined to 49.8 index points, down from 50.9 in April. Despite the fall, the average level of 50.4 points recorded during the first two months of the second quarter is not only above the neutral 50-point mark, but also higher than the 49.2 index points registered in the first quarter. This bodes well for a recovery in the manufacturing sector, after manufacturing output contracted on a quarter-on-quarter basis in the first quarter of 2018.

After surging from 34 to 45 in the first quarter, the RMB/BER Business Confidence Index (BCI) deteriorated to 39 in the second quarter of 2018. This means that close to three fifths of respondents now regard prevailing business conditions as unsatisfactory – a disappointing outcome, yet probably an accurate reflection of reality.

The FNB/BER Consumer Confidence Index (CCI) skyrocketed to an all-time high of +26 in the first quarter of 2018. The latest reading surpassed the previous record high of+23 index points reached in the first quarter of 2007. The dramatic increase signals a substantial improvement in consumers' willingness to spend. The extraordinary improvement in consumer sentiment can largely be ascribed to the change in the country’s leadership. There is a risk that the CCI overshot during the first quarter on the back of the positive sentiment, implying that there could be a negative correction during the second quarter.

Economic indicators

Key indicators

Wed Jun 20 2018 09:24:34

Rand-Dollar

13.7062

-0.31%

Rand-Pound

18.0254

-0.53%

Rand-Euro

15.8544

-0.52%

Gold

1274.03

-0.58%

Platinum

861.62

-1.85%

Brent Crude EOD

75.02

-0.45%

R186

9.12

-4bps

R207

7.78

-3bps

Share indices (Previous day's close)

Last updated: Wed Jun 20 2018 08:14:54

JSE all-share

56253

-1.72%

JSE Top 40

50020

-1.93%

US S&P 500

2763

-0.40%

German Dax

12678

-1.22%

Japan Nikkei

22278

-1.77%

Please note

ECONOMIST INTERNSHIP PROGRAMME

The BER at Stellenbosch University, the South African Reserve Bank and Absa Bank Limited wish to announce the commencement of recruitment for the 2019 economist internship programme at the BER.
For more information, click here.

Recent releases

This report outline some of the key findings of the BER’s 2018Q2 Building survey, including the FNB/BER Building Confidence Index. The FNB/BER Building Confidence Index lost 14 index points in 2018Q2 to register a level of 29. This wiped out all the gains of 2018Q1. While the fall in sentiment was largely due to lower confidence among hardware retailers and manufacturers of building material, underlying activity in the sector was also weaker. The data for 2018Q2 is also provided....Get it here

This report outline some of the key findings of the BER’s 2018Q2 Building survey, including the FNB/BER Building Confidence Index. The FNB/BER Building Confidence Index lost 14 index points in 2018Q2 to register a level of 29. This wiped out all the gains of 2018Q1. While the fall in sentiment was largely due to lower confidence among hardware retailers and manufacturers of building material, underlying activity in the sector was also weaker....Get it here

The FNB/BER Building Confidence Index lost 14 index points in 2018Q2 to register a level of 29. This wiped out all the gains of 2018Q1. While the fall in sentiment was largely due to lower confidence among hardware retailers and manufacturers of building material, underlying activity in the sector was also weaker....Get it here

The FNB/BER Building Confidence Index lost 14 index points in 2018Q2 to register a level of 29. This wiped out all the gains of 2018Q1. While the fall in sentiment was largely due to lower confidence among hardware retailers and manufacturers of building material, underlying activity in the sector was also weaker....Get it here

A raft of domestic data released last week suggested that, after a poor first quarter, the SA economy remained under pressure at the start of 2018Q2. ...Get it here

This presentation-style note summarises the second quarter business survey results. In line with the drop in the RMB/BER Business Confidence Index, the average activity indicator dipped back to 17Q4 levels. Overall, the survey results highlight the tight spot the economy is currently in and imply that GDP growth for 2018 as a whole might be closer to 1.5% than to 2%...Get it here

After surging from 34 to 45 in the first quarter, the RMB/BER Business Confidence Index (BCI) deteriorated to 39 in the second quarter of 2018. This means that close to three fifths of respondents now regard prevailing business conditions as unsatisfactory – a disappointing outcome, yet probably an accurate reflection of reality....Get it here

Over the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This means that the government is faced with some tough choices. The fact that GDP growth disappointed in Q1 and suggests that full-year growth could be lower than forecast by Treasury further complicates matters. This, as well as the latest manufacturing output data, is unpacked in the domestic section. On the international data front, the major releases focussed on trade and the outcomes were essentially fuel on the fire of the trade-war rhetoric coming from the US. The big US trade deficit remains one of US President Donald Trump’s pet peeves. Trump made this clear again on a Twitter rant in the wake of the weekend’s G7 meeting in Canada. ...Get it here

Stats SA reported that GDP declined in 2018Q1. On a number of fronts, it was a horrible GDP print. ...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

Forecast publications

Medium-term prospects for the SA economy have improved. Mostly, this stems from notably less concern about domestic politics and the policy environment....Get it here

Global growth moved from strength to strength in 2017, with activity picking up in most country groupings. However, amidst political infighting and policy uncertainty SA was in no position to take advantage of the upturn in global growth. Developments since the ANC elective conference in December 2017 have led to increased optimism that overall economic activity might surprise on the upside going forward....Get it here

Global growth moved from strength to strength in 2017, with activity picking up in most country groupings. However, amidst political infighting and policy uncertainty SA was in no position to take advantage of the upturn in global growth. Developments since the ANC elective conference in December 2017 have led to increased optimism that overall economic activity might surprise on the upside going forward....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

Given the lack of visibility on politics and the recent negative experience, we have stuck to a conservative medium-term real GDP growth outlook of only 1.6%....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

A raft of domestic data released last week suggested that, after a poor first quarter, the SA economy remained under pressure at the start of 2018Q2. ...Get it here

Over the weekend, welcome news broke that the majority of public sector trade unions had signed a multi-year wage deal with the government. Unfortunately, the costs are significantly more than budgeted for by National Treasury in the February Budget. This means that the government is faced with some tough choices. The fact that GDP growth disappointed in Q1 and suggests that full-year growth could be lower than forecast by Treasury further complicates matters. This, as well as the latest manufacturing output data, is unpacked in the domestic section. On the international data front, the major releases focussed on trade and the outcomes were essentially fuel on the fire of the trade-war rhetoric coming from the US. The big US trade deficit remains one of US President Donald Trump’s pet peeves. Trump made this clear again on a Twitter rant in the wake of the weekend’s G7 meeting in Canada. ...Get it here

It was a busy week on the domestic data front. The manufacturing Purchasing Managers’ Index (PMI) and new vehicle sales data for May showed that the economy is likely to perform better in Q2 compared to Q1. However, the first quarter GDP data to be released tomorrow is likely to be a disappointingly weak print. In the international section, the focus is on the latest employment and inflation data from the US. The job figures came in better than expected, and with inflation remaining steady, this suggests that the US Federal Reserve (Fed) remains on track to hike its policy interest rate next week. ...Get it here

In the Domestic section we review the latest interest rate decision by the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB), as well as consumer price inflation data for April. CPI inflation came in below expectations for April and while the MPC judged the risks to the inflation outlook to be on the upside, the lower-than-expected print contributed to a mostly unchanged SARB headline CPI forecast. Finally, as expected, S&P Global Ratings kept its rating for SA’s sovereign debt unchanged at below investment grade. More on the rationale for this decision and the market reaction in the Markets section. In international news, we focus on the flash Purchasing Managers’ Indices (PMI) for May released around the world. In all, the preliminary numbers paint a mixed picture for global growth. ...Get it here

Retail and wholesale sales data released by Statistics South Africa (Stats SA) over the week added to concerns of a sharp slowdown (and potentially even an outright contraction) in overall GDP growth in 2018Q1. While sales growth held up reasonably well on a monthly basis in March, both the retail and wholesale sectors contracted during the first quarter. This adds to weak mining and manufacturing data. On the international front, activity data out of China and Japan also disappointed, providing further evidence of a marginal slowdown in global growth during 2018Q1. ...Get it here

Last week, global financial markets were focused on US President Trump’s decision to re-impose economic sanctions on Iran. This decision pushed the oil price even higher. On a more positive note, somewhat lower-than-expected US inflation data for April eased fears that the Federal Reserve (Fed) may be more aggressive with future policy interest rate hikes. Meanwhile, the domestic economy is set up for a disappointing growth rate in the first quarter, as both manufacturing and mining output fell in this period. Read more below. In other global news, the Bank of England (BoE) held its policy interest rate unchanged. The dovish sentiment signals that UK interest rates could remain at current levels a bit longer. Besides this, China recorded a trade surplus in April, compared to a deficit in March. Importantly, the surplus with the US widened despite selected tariff hikes by the US....Get it here