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Brief note intended as a more regular interface with our clients. The emphasis is to provide our interpretation of important economic events, such as South African Reserve Bank interest rate statements, and key data releases, including GDP growth figures.
This note summarises the insights from the latest round of BER surveys in the trade, manufacturing and building industries. Business confidence declined by two index points to 49 in 2015Q1. However, the slight decline in the overall confidence level masks the swing in favour of the trade sector. The underlying survey results substantiate the relative outperformance of the retail trade sector, while it is clear that manufacturing production has not ramped up further (as was the case in 2014Q4 in the aftermath of the metal industry strike during the previous quarter) and activity in the building sector stalled. In terms of the implications for the 2015Q1 GDP reading, the quarter-on-quarter (q-o-q) growth rate is expected to decline in line with lower confidence levels. Furthermore, it is likely that the consumer sectors will make the largest contribution to growth in the quarter.
