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| 25 October 2011 |
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EFFECTIVENESS OF MTBPS CONSTRAINED BY INABILITY OF GOVERNMENT TO SPEND BUDGETS APPROPRIATELY AND EFFECTIVELY
The ability of National Treasury to influence economic growth and job creation through fiscal policy has become quite limited in recent years by a glaring inability on the part of the authorities to spend the funds appropriated effectively. In particular, fancy job creation schemes and infrastructural investment projects have not been able to get under way in the manner envisaged by Treasury ... |
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| 24 October 2011 |
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SUDDEN JUMP IN INSOLVENCIES AND LIQUIDATIONS IN AUGUST AND SEPTEMBER RESPECTIVELY
Following a declining trend for several months in the growth of insolvencies and liquidations of companies, the latest figures relating to insolvencies in August and liquidations in September show a sudden increase.
This is somewhat counterintuitive bearing in mind the fact that interest rates remain at 37-year lows which ought to have resulted in a further improvement in the financial he... |
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| 21 October 2011 |
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Improvement in building plans passed in August in line with pickup in all other domestic indicators
One would like to think that the ongoing low level of interest rates will contribute towards preventing building activity from sliding too far over the coming year. Accordingly, one is reluctant to interpret the July figures alone as signifying a renewed severe downturn in the building industry. On the contrary, there have certainly been signs of residential building bottoming out after ... |
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| 20 October 2011 |
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Recovery in growth of wholesale sales in August in line with general recovery in domestic economic activity
For some weeks now, we have been suggesting that the steep dip in growth of economic indicators relating to the domestic business scene during the months of May, June and July, had probably been caused by a combination of statistical factors linked to comparison against elevated figures during the World Cup, as well as to strike activity in July. Accordingly, one could expect a recovery in ma... |
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| 19 October 2011 |
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CPI inflation jumps in September as expected due to food and petrol, justifying no change in interest rates
The y-o-y CPI inflation rate increased in line with our forecast, by 0.4%, to 5.7% in September, from 5.3% in August. This outcome was marginally higher than consensus forecasts.
The main contributors to the increase in inflation were, as expected, the prices of food and petrol. Food prices rose in response to higher agricultural prices over the past year, recording a 1.1% m-o-m... |
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| 14 October 2011 |
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Growth in mining production recovers slightly in August, but was still weak
After dipping sharply in July as a result of industrial action in the sector, y-o-y growth in mining production understandably improved in August, rising to -3.3%, from -5.1% in July, on the back of m-o-m seasonally adjusted growth of 5.2%. Nonetheless, this was still a slightly disappointing outcome in terms of the degree of recovery.
Weakness in production was especially prevalent ... |
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| 13 October 2011 |
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SHARP IMPROVEMENT IN AUGUST MANUFACTURING CONFIRMS THAT MAY TO JULY WERE DEPRESSED BY SPECIAL TEMPORARY FACTORS
In recent weeks, we have been indicating disbelief at the premise that the South African economy was plunging into recession as some analysts were indicating and on this basis calling for monetary loosening. We have argued consistently that the domestic economy might have slowed, but that the underlying downward trend was not dramatic. Figures on economic activity between May and July ha... |
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| 11 October 2011 |
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September cement sales: another real economic indicator showing some life in the economy
In recent months, there have been several media reports about the manner in which the economy has been plunging towards a recession in tandem with similar trends in global economic activity. However, we have consistently argued that the degree of softness in real economic activity domestically between May and August was caused by statistical, as well as other temporary factors. In partic... |
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| 6 October 2011 |
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Electricity demand increases in August as effects of strike activity not as great as previous month
Electricity demand has been quite subdued in recent months in response to the slowdown in global economic activity as the demand for electricity intensive metal exports from South Africa has declined. In addition, it appears that demand management initiatives and a further sharp tariff hike by Eskom are resulting in consumers saving on electricity and switching to alternative source of energy... |
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| 4 October 2011 |
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Welcome recovery in government revenue growth in August indicative of some growth in domestic economy
In July, one had reported on a fairly dramatic decline in the growth of government revenue and a resultant deterioration in the country's fiscal balances. However, we had warned at the time that this may well have been attributable to the effects of the widespread industrial action through the economy. Such strike activity would have resulted in an inability on the part of workers to mai... |
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