Public sector jobs a key trend to watch in data
Claire Bisseker
MORE job losses are on the cards, factory gate prices will rise, private sector credit numbers will remain subdued and the country should brace for a less impressive trade surplus if economists’ gloomy forecasts for the week ahead are correct.
Statistics SA’s (Stats SA’s) Quarterly Employment Statistics survey comes out on Tuesday, when it is expected to confirm weak labour market dynamics following the loss of 15,000 jobs in the formal economy in the first quarter.
“Subdued economic activity and depressed business confidence are likely to continue restricting private sector employment growth,” said Investec economist Kamilla Kaplan. “Indeed, survey evidence drawn from the retail and manufacturing confidence surveys signals poor employment prospects,” she added.
Statistician-General Pali Lehohla said in the first quarter the “bleeding of jobs” was consistent with the deep economic contraction recorded in the mining and manufacturing sectors at the time.
Job losses, were in fact, relatively broad-based, with five of the eight industries surveyed in the first quarter shedding jobs, including local and provincial government. The decline in public sector employment bucked a long-established trend and it will be important from a fiscal sustainability standpoint whether this correction carried through into the second quarter.
Stats SA will on Thursday release the producer price index (PPI) for August.
Economists are divided over whether the fuel price cuts experienced during August will have done enough to offset high and rising food prices, which remain the main driver of PPI.
Kaplan said she expected PPI inflation to have lifted slightly to 7.5% year on year in August from 7.4% year on year in July, noting that upward price pressure from manufactured foods and lower base effects should have boosted the annual growth rate.
BNP Paribas Securities economist Jeffrey Schultz noted, however, that the slowdown in the price index of the Bureau for Economic Research’s purchasing managers’ index suggested factory gate prices could moderate in coming months.
Private sector credit extension data will also be released on Thursday. Macquarie Equities analyst Elna Moolman said she expected growth to have moderated to 6.6% year on year in August from 6.8% in July.
Rounding off the week on Friday will be the release of the trade balance for August. It is likely to show a smaller trade surplus of about R3bn-R4bn, down from R5.2bn in July. First National Bank said it could not rule out SA swinging into a trade deficit in August, noting the slow start to the third quarter.