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Agribusiness confidence dropped 6.9 points in 3Q18, while business confidence lost 1 point. July manufacturing production increased 2.9% y/y while retail sales expanded a modest 1.3% and mining output plunged -5.2%
The economy contracted by -0.7% q/q in 2Q18, confirming that the country entered a technical recession. The August Absa manufacturing PMI collapsed to 43.4 from 51.5.
July inflation printed at 5.1% y/y from 4.6% in June, slightly ahead of our expectation of a 5% handle. Freight payload volumes contracted -3.3% y/y in June, while food and beverage income was up only 2.8% year-to-date in the same month.
Manufacturing production was the only data of any consequence out this week, and June was another grim month for the sector, which expanded by a weak 0.7% y/y and 0.3% m/m.
Mining production volumes remained in the doldrums in May, contracting -2.6% y/y compared to a fall of -4.4% and -8.5% in the two preceding months.
South Africa registered its third consecutive trade surplus in May, which came in at R3.5bn. The budget balance for the month was disappointing, registering a deficit of -R17.7bn.
The FNB/BER Civil Confidence Index gained 3 points to register a level of 15 in 2Q2018, but the figure is still the fourth lowest print in the 21 year history of the index.
1Q18 GDP growth disappointed sharply, even against our bearish forecast of -1% q/q. Growth contracted -2.2% q/q and expanded just 0.8% y/y. It was not a great start to the second quarter for the manufacturing sector with April output ring just 1.1% y/y, and down -1.6% y/y on a seasonally adjusted basis.
April headline inflation surprised on the low side, printing at 4.5% y/y, below our expectations of 4.8%. Core inflation, which strips out food and non-alcoholic beverages, fuel and energy accelerated to 4.5% y/y from 4.1% the previous month.
24 May 2018: Following the South African Reserve Bank's decision earlier today to keep interest rates unchanged, FNB confirms that it will maintain its prime lending rate at 10% and will review its position following the next SARB MPC meeting in July.
South Africa's unemployment rate in 1Q18 was unchanged from 4Q17 at 26.7%. Of the 307,000 new entrants to the labour force, 206,000 were absorbed by the labour market and the labour force participation rate edged higher to 59.3% from 58.8% in 4Q17...
The March trade balance returned a surplus of R9.4bn, reducing the year-to-date deficit to R18.3bn from February's -R27.7bn. It was an encouraging print which exceed consensus expectations, but with our view for accelerating domestic consumption, we expect import growth to pick up in the coming months...
Highlights in the South African economy, from manufacturing production to mining output, an overview of economic activity in Sub-Saharan Africa, a snapshot of the economy in the rest of the world and economic indicators for the weeks ahead.
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