JOHANNESBURG - The manufacturing and mining production data should dominate the release calendar next week, but there are other releases that will add colour to how the economy started the year.
The manufacturing data is the first release and that will be published on Tuesday by Statistics South Africa. In the gross domestic product (GDP) release for 2017, manufacturing grew by 4.3% quarter-on-quarter (q/q) on a seasonally adjusted annualised basis in the fourth quarter and the January data should show that this growth momentum carried into 2018, as many shops are very low on inventories and have frequent stock outs.
The South African Chamber of Commerce and Industry (SACCI) Trade Activity Index (TAI) on Wednesday will help to show how economic indicators have reacted in February. In January the seasonally adjusted TAI rose to 51, where 50 is the breakeven level, from 48 in December and 41 in November. The sales volumes index rose to 43 in January from 41 in December, 49 in November and 56 in October, while the new orders index was steady at 40 in January and December from 45 in November and 41 in October. The input price index fell to 65 in January from 66 in November and 72 in October. The employment sub-index rose to 46 in January after being steady at 43 in December, November, October, September, August and July.
On Thursday there will be three releases, namely civil cases for debt, mining production and building plans.
The total number of civil summonses issued for debt fell by 9.8% in 2017, while the total number of civil judgements recorded for debt decreased by 13.4% to 229 006 with value of those judgement dropped by 1.8% to R3.949 billion. A continuation in these declines is expected for January.
Mining production slowed to a tiny 0.1% year-on-year (y/y) rise in December after a robust 6.5% y/y jump in November and a 5.3% y/y gain in October. For the year as a whole, mining production increased by 4.0% and a return to this level of growth is expected in the January data.
The Chamber of Mines surveyed its members towards the end of 2017 on what a more conducive regulatory environment would mean for fixed investment and job creation. The result was that the estimated capital spending in the mining sector (stretching over the next four years) amounted to more than R145 billion, but a more certain and conducive environment (covering at least another three years) would unlock an additional R122 billion or an 84% increase. The government has committed itself to signing a new Mining Charter acceptable to all stakeholders within three months.
The other major data release is building plans. That has two components, namely building plans passed by the larger municipalities and building plans completed. The former is a leading indicator as it shows what building activity is likely to result, while the latter is a coincident or lagging indicator as it shows what has been built. Please bear in mind that it takes around six months to build a house and around two years to build a major non-residential building such as a shopping mall or office complex. Building plans passed have been impacted by the drop in business confidence, so the real value of non-residential plans passed plunged by 15.1% in 2017.
Building plans completed on the other hand showed a strong rise in 2017 as the real value of building plans completed rose by 12.8% y/y after increasing by 1.8% in 2016 and a 3.9% gain in 2015. Residential plans completed climbed by 4.9%, while non-residential plans grew by 35.5%. Additions and alterations gained 4.7%.