Key data to give pointer on economy

THE November mining production data on Tuesday and the November retail data on Wednesday will be key data releases this week, but there are several other releases that will help inform the public about the state of the economy.

Mining production rose 5.2% year- on- year ( y/ y) in October after a small revised 0.3% (0.9%) y/y drop in September. The largest positive contributors were manganese ore (up 20.4%), iron ore (up 17.9%), other non-metallic minerals (up 16.3%), and coal (up 6%). Given the strong overseas demand for minerals, another y/y increase should be expected.

The key question is how much did the “Black Friday” and “Cyber Monday” promotions encourage consumers to open their wallets? Real retail sales slowed to a preliminary 3.2% y/y increase in October from a revised 5.7% (5.4%) y/y jump in September and a 5.4% y/y rise in August. The latter month was when the growth momentum changed as farmers received payment for their record maize harvest.

The result is that in the three months ended October real retail sales were up 4.7% y/y compared with only a 0.9% y/y increase in the first seven months of the year.

The reason why retail and other domestic trade is so important is because trade accounted for 36% of total turnover of non-farm formal businesses in the second quarter of 2017, followed by 27% for manufacturing, 12% for business services, 9% for transport and communications, 6% for mining and 5% for construction. The business sector earned 11 cents of profit for every rand of turnover generated. Business services took the top spot with the highest profit margin ratio, followed by personal services, manufacturing, transport and trade. The electricity, gas and water supply industry, as well as mining, experienced losses.

In addition, there will also be data releases on wholesale trade, motor trade, building plans as well as statistics on civil cases for debt.