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% quarteron-quarter (q/q) on a seasonally adjusted annualised basis in the fourth quarter and the February data should show that this growth momentum carried into 2018, as many shops are very low on inventories and have frequent stock outs.
Manufacturing production grew by 2.5% year-on-year (y/y) in January 2018 after a 0.5% drop in 2017. There has been a fairly steady upward progression in the seasonally adjusted manufacturing production index since March 2017 and the index in December 2017 was up a massive 5% since then.
The gains in manufacturing are broad based with seven out of the ten sectors showing a q/q rise in the fourth quarter. In January 2018 food production was up 10.1% y/y, but chemical production was down 3.2% y/y.
The South African Chamber of Commerce and Industry (SACCI) Trade Activity Index (TAI) on Thursday will help to show how economic indicators have reacted in March after a downturn in February.
The seasonally adjusted South African Chamber of Commerce and Industry (SACCI) Trade Activity Index fell to 42 in February from 51 in January, 48 in December and 41 in November.
The sales volumes index was steady at 43 in February and January from 41 in December, 49 in November and 56 in October, while the new orders index edged up to 41 in February after being steady at 40 in January and December from 45 in November and 41 in October.
The input price index fell to 61 in February from 65 in January, 66 in November and 72 in October. The sales price dipped to 48 in February from 50 in January and 51 in December. This is the first time since April 2009 (after the global recession of 2008/09) that according to respondents, sales prices were declining – i.e. below the 50 index mark. The employment sub-index was steady at 46 in February and January after being steady at 43 in December, November, October, September, August and July from 47 in June, 49 in May and 48 in April.
Mining production rose by 2.5% y/y in January after a 4.0% gain in 2017. The mood at the Mining Indaba and the start of Gamsberg production in mid-2018 should result in a strong increase in 2018 as well. In January iron ore production surged by 25.1% y/y, ‘other’ non-metallic minerals soared 27.1% y/y, but precious metals were weaker with platinum group metals falling by 13.6% y/y and gold down 7.7% y/y.
- BUSINESS REPORT