JOHANNESBURG - There will be a flurry of data releases next week as there will be the normal month-end data releases as well as the start-of-the-month data releases.
The week starts with the January statistics on liquidations and the December data on insolvencies. The number of liquidations rose by 11.4% y/y in December to 137 after jumping by 35.0% y/y in November to 216. Despite the recent y/y increases, the annual total of 1 868 was 3.4% less than the 1 934 of 2016 and substantially less than the 3 559 of 2011. The January data will confirm whether we are in an increasing trend, or whether the recent y/y increases will continue. The number of insolvencies rose by 13% y/y in November to 235 after a 13.7% y/y gain in October to 249. There was small 1.1% y/y increase in the first 11 months of 2017 and there is likely to be a small rise for the full year.
Wednesday will be busy as we have January money supply data at 8am, the January producer inflation data at 11:30am, the January foreign trade data at 2pm and the January Statement of the National Revenue, Expenditure and Borrowing later in the afternoon.
The money supply data will show whether there is renewed appetite for credit from the household sector, as this has been subdued in the past few months, but the 7.9% year-on-year (y/y) surge in real retail sales in November shows there is renewed appetite for credit. Broad M3 money supply growth eased to 6.41% y/y in December from 6.61% y/y in November and 5.01% y/y in October, while narrow M0 money supply growth rose to 8.05% y/y from 6.55% y/y and 6.26% y/y.
Producer inflation for final manufactures eased to 4.8% in 2017 from 7.0% in 2016 and we should see subdued producer inflation in January due to the strength of the rand. Intermediate goods prices rose by 4.0% in 2017 after a 6.8% gain in 2016. Electricity price increases moderated to 5.8% in 2017 from 10.4% in 2016. Mining prices increased by 5.4% in 2017 from a 11.5% surge in 2016. Agricultural prices were stable with only a 0.4% rise in 2017 after a 16.4% jump in 2016.
The foreign trade surplus widened to R15.72bn in December from R13.05bn in November as exports fell less on a monthly basis than imports. January is normally a strong surplus month as imports remain subdued, while exports recover after the December holiday slowdown.
The January fiscal data will confirm whether government revenue is improving this year as the first few months of the fiscal year were poor as revenue growth lagged expenditure growth. Revenue growth was 10.0% y/y in December from 6.7% y/y in November and only 3.1% y/y in October.
On Thursday we have the start-of-the-month releases with the Absa February purchasing managers’ index (PMI) first up in the morning, followed by January electricity data at 1pm and then February new vehicle sales and exports in the afternoon.
The Bureau for Economic Research (BER) Absa manufacturing index rose to 49.9 in January after easing to 44.9 in December from 48.6 in November. January should see the PMI move above the breakeven 50 level. The last time the PMI was above 50 was in May 2017.
Although South Africa’s electricity consumption rose by 0.5% in 2017, this consumption was still less than in 2007 despite a more than 10% rise in the population over this period. In January we should see electricity consumption rise by more than 1% y/y.
The National Association of Automobile Manufacturers of SA (Naamsa) new vehicle sales rose by 1.8% in 2017 to 557,586 units after slumping by 11.4% in 2016. The year ended off on a disappointing note as new vehicle sales fell by 2.4% y/y in December and this continued into 2018 with an- 8.9% y/y drop in January. Motor dealers are expecting a return to growth in February.