Exports hold the key to economic growth this year as the three other main components of the economy, namely household consumption, government consumption and investment could decline or will have subdued growth at best. Household consumption remains under pressure due to high unemployment, little job creation and the ever-present threat of further retrenchments as businesses react to subdued domestic demand. The Treasury in February expected household consumption growth to increase slightly to a 1.3% pace this year from only 0.8% last year, but it would remain below the 1.7% rise achieved in 2015. Government consumption is forecast to ease to…
Author: Helmo Preuss
A new website, www.gentlereminders.club, aims to help small businesses with managing their cash flow, as many businesses fail because creditors did not pay them on time or refused to pay despite receiving goods or services from the business. Deputy Minister in the Presidency responsible for Planning, Monitoring and Evaluation, Buti Manamela, said a failure to pay invoices within 30 days is a financial misconduct. The government at central, local and provincial level is however part of the problem. In April 2016, there were 11 375 invoices due by national departments that were paid after 30 days with a value of…
Easing consumer inflation in July boosted real, in other words after the effects of inflation have been taken out, disposable income to the strongest gain since August 2015. Consumer inflation eased to 4.6% year-on-year (y/y) in July from 5.1% y/y in June and 5.4% y/y in May. Over the same period the real BankServe Disposable Salary Index (BDSI) compiled by economists.co.za grew from 0.9% y/y in May to 1.3% y/y in June and 2.5% y/y in July. The July 2017 y/y increase was the largest since August 2015, when it was 3.8% y/y. As household consumption expenditure accounts for…
Richard Cock, the conductor of the Cape Philharmonic Orchestra’s (CPO) sold-out Gala Concert at the National Arts Festival, is always happy when the concert is sold out as that shows that Festival goers appreciate classical music even when it is disruptive music. “As with all programmes, I am inspired by themes, and thought of various types of disruption, which can be both a positive and a negative thing. Also there are historical disruptions, like wars etc which can be linked. I was also thinking how things were before and after the disruption,” he said. One of the disruptive pieces was…
The mixed signals from the Purchasing Managers’ Index (PMI) and the Quarterly Labour Force Survey (QLFS) once again highlight why it is a job requirement for economists that they have two hands. On the one hand, the Standard Bank PMI shows that the private sector improved in July and the number of jobs increased by more than half a million (554 000) or 3.6% year-on-year (y/y) in the second quarter, while on the other hand, the Absa PMI showed a deterioration in the manufacturing sector and the unemployment rate remained stubbornly high at 27.7%. The PMI is the first data point…
The drop in announced large capital expenditure projects to 32 in the first half of 2017 from 44 in the first half 2016 and 46 in the same period in 2015 showed the impact of last year’s economic headwinds and political uncertainty this year. This policy uncertainty was caused in part by having three Finance Ministers in four days in December 2015 and a further change in Finance Ministers in March this year. Nedbank has been conducting the research since 1993 with the help of Engineering News and the annual project value record was set in 2006 at R1.1…
South Africa’s bulk export volumes surged by 34.5% year-on-year (y/y) in July to 15.6 million tonnes according to Transnet National Ports Authority (TNPA). This brought the increase for the first seven months to 8.7% y/y, showing that mining and agricultural bulk exports are boosting the South African economy. The data shows that the primary sector that is agriculture and mining will be boosting the South African economy this year. In the first quarter these two sectors were the only ones out of the ten major economic sectors that contributed to the quarterly change in the first quarter. Their contribution is…
There is a Masai proverb that reads: “Even the ostrich, with its long neck and sharp eyes, cannot see what will happen in the future.” That uncertainty is vividly illustrated by the disagreement about this year’s economic growth between the International Monetary Fund (IMF) and the South African Reserve Bank (SARB). On 20 July the SARB said: “The domestic growth outlook remains a concern, following the surprise broad-based GDP growth contraction during the first quarter of this year. With the exception of the primary sector, all sectors recorded negative growth. While positive growth is expected in the second quarter, the…
By Helmo Preuss After issuing a media invitation at 10h19 on Monday to attend the annual results presentation at 11h00 on Tuesday, the Eskom media desk at 20h23 announced a postponement due to unforeseen circumstances. “Please be advised that due to unforeseen circumstances the Eskom Integrated Annual Results Announcement, scheduled to take place tomorrow, has been postponed until further notice. We sincerely apologise for any inconvenience caused,” the media statement said. According to Business Day, the new Eskom board have announced sanctions against former acting Chief Executive Matshela Koko. There are allegations of a conflict of interest as Eskom granted contracts…
By Helmo Preuss After eight consecutive quarters in which agriculture acted as a drag on gross domestic product (GDP) growth, the first quarter 2017 recovery with a strong 22.2% quarterly increase on a seasonally adjusted annualised rate (saar) basis was very welcome. The June 24% year-on-year (y/y) jump in tractor sales to 479 units shows that the growth contribution remains on track in the second quarter. Farmers started harvesting this year’s record maize crop in May and during June they got a better estimate of what to expect in terms of revenue. This allows them to make informed buying decisions…