By Helmo Preuss After three consecutive quarters in which manufacturing production acted as a drag on gross domestic product (GDP) growth, the May 2017 data released by Statistics South Africa (Stats SA) showed that a recovery was under way in the second quarter. Economists have been worried that manufacturing production would continue to disappoint and on a year ago basis, manufacturing production is down 1.6% in the first five months of 2017. In South Africa however we follow the American and European practice of focusing on the quarterly change, rather than the year ago change, which is used by most…
Author: Helmo Preuss
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By Helmo Preuss Although policy uncertainty rose in the second quarter after the late March cabinet reshuffle compared with the first quarter, it still remained below the level of the fourth quarter 2015 when President Jacob Zuma fired one Finance Minister, then another one a few days later, so then we had three different Finance Ministers in only four days. North-West University School of Business and Governance economist Professor Raymond Parsons said that the political uncertainty was a tax on South Africa’s economic performance. The school constructs a Policy Uncertainty Index (PUI) on a quarterly basis by looking at how…
The South African Chamber of Commerce and Industry (SACCI) Business Confidence Index (BCI) recovered to 94.9 in June 2017 from 93.2 in May 2017 and 95.1 in June 2016. SACCI said that given the unpredictable economic and political situation, business remained resilient.
Most traders interviewed in a random sample at Village Green and in town on Saturday midday with a follow-up on Sunday reported higher sales compared to last year, despite one of the main Village Green drawcards – the beer tent – not being operational due to a licensing glitch.
By Helmo Preuss The 7.1% improvement in the terms of trade between the first quarter 2016 and the first quarter 2017 is likely to continue into the remainder of the year and will boost economic growth and strengthen the rand. The terms of trade are a measure of what a country gets for its exports relative to those of its imports. Terms of trade data are often recorded in an index so that economic monitoring can be performed and it is easy to draw conclusions relative to the base year. For example, one ounce of gold could buy 24…
By Helmo Preuss The Department of Energy is likely to implement a retail petrol price drop of some 68 cents per litre (c/l) on 5 July provided the daily over-recovery remains near the 23 June level. The wholesale diesel (0.05% Sulphur) price could fall by 62 c/l. This will be good news for National Arts Festival goers from outside Grahamstown as their petrol cost will fall by 3.8% year-on-year (y/y), while diesel consumers will see a 6.7% y/y drop, which should cut distribution and farming costs. South Africa’s daily unleaded 95 Octane petrol price over-recovery was 73.3c/l on 23 June,…
By Helmo Preuss The parachute packing skills that Mkhuseli Tukulula, who is not small, but it is the name by which his friends know him, had acquired over many weekends at EP Skydiving since 2002, stood him in good stead last weekend. At the international tandem skydiving event held at Plettenberg Bay, “Small” showed that he was the man for the BIG occasion, as he came second in the parachute packing competition, behind a German, but ahead of a Frenchman. The competition values both speed and accuracy. Speed in that packers have only ten minutes in which to spread the…
By Helmo Preuss The MMI/ Unisa Consumer Financial Vulnerability Index (CFVI) showed that South African consumers are mildly exposed as the index slipped 52.32 in the first quarter from 52.71 in the fourth quarter, but remained above the average of the past few years. The record low 45.92 reached in the third quarter 2013. The CFVI measures consumers’ sentiments in terms of their income, expenditure, savings and debt servicing. The term ‘Consumer Financial Vulnerability’ implies that consumers experience a sense of financial insecurity or an inability to cope financially. MMI’s, Shelley van der Westhuizen says this drop is not surprising…
By Helmo Preuss The South African current account deficit on the balance of payments widened to 2.1% of gross domestic product (GDP) on a seasonally adjusted annualised basis in the first quarter 2017. It rose from 1.7% in the fourth quarter 2016, the South African Reserve Bank (SARB) said in its latest Quarterly Bulletin. The rand has weakened considerably over the past few years versus the US dollar as a current account deficit above 3% is seen as unsustainable, reaching a record worst level in January 2016 before recovering during the course of 2016 as the current account narrowed. The consensus…
The Black Industrialist Programme (BIP) is a key component of the Department of Trade and Industry’s (the dti) Industrial Policy Action Plan (IPAP) and is aimed at boosting economic growth and job creation. The progress of the BIP was addressed at the Manufacturing Indaba in 2016 and the discussion will continue at the 2017 Manufacturing Indaba at Emperors Palace in Ekurhuleni from the 27 – 28 June 2017. A senior economist at the World Bank’s Global Practice, Dr Marek Hanusch, said at the dti dialogue in March that policy makers should re-orient South Africa’s investment tax incentives (ITI) towards trade,…