Com­ing data re­leases to re­flect the true state of na­tion as Bud­get day looms

ECO­NOMIC WEEK AHEAD

Weekend Argus (Saturday Edition) - - BUSINESS - HELMO PREUSS

THERE will be a flurry of data re­leases next week as there will be the nor­mal month-end state­ments as well as the startof-the-month ones.

On Tues­day we have De­cem­ber money sup­ply data and the De­cem­ber State­ment of Na­tional Rev­enue, Ex­pen­di­ture and Bor­row­ing later in the af­ter­noon.

The money sup­ply data will show whether there is re­newed ap­petite for credit from the house­hold sec­tor, as this has been sub­dued in the past few months, but the 8.2% year-on-year (y/y) surge in real re­tail sales in Novem­ber shows there is re­newed ap­petite for credit. Broad M3 money sup­ply growth rose to 6.61% y/y in Novem­ber from 5.01% y/y in Oc­to­ber, while nar­row M0 money sup­ply growth rose to 6.55% y/y from 6.26% y/y.

The De­cem­ber gov­ern­ment fi­nanc­ing data will be cru­cial in de­ter­min­ing the course of the Bud­get to be pre­sented on Fe­bru­ary 21. The first few months of the fis­cal year were poor as rev­enue growth lagged ex­pen­di­ture growth. The fis­cal deficit, how­ever, nar­rowed by 6.1% y/ y in Novem­ber to R15.3bn as gov­ern­ment rev­enue growth out­paced spend­ing.

Rev­enue growth was 6.7% y/y in Novem­ber from only 3.1% y/y in Oc­to­ber and 5.3% y/y in Septem­ber, while spend­ing rose by 4.5% y/y af­ter a 6.0y/y in­crease and a 5.2y/y gain. Given the 10.7% y/ y in­crease in nom­i­nal re­tail sales in Novem­ber, VAT re­ceipts should have surged as well, in ad­di­tion to com­pany prof­its. De­cem­ber is gen­er­ally the month when the gov­ern­ment gets its largest monthly tax take and rev­enue should once again ex­ceed R140bn.

On Wed­nes­day we will have the De­cem­ber for­eign trade data at 2pm.

South Africa’s to­tal elec­tric­ity con­sump­tion rose by 0.9% y/y in Novem­ber. The in­crease at end- user stage, in other words dis­trib­uted to prov­inces and not used in power sta­tions, showed a stronger in­crease and was up 2.1% y/y in Novem­ber. We should see a y/y in­crease in De­cem­ber as in­dus­trial pro­duc­tion has been on a re­cov­ery mode re­cently with steel pro­duc­tion for in­stance up 20.9y/y in De­cem­ber.

The for­eign trade sur­plus widened to R13bn in Novem­ber from R4.339bn in Oc­to­ber as ex­ports surged by 17.1% y/y to a record R116.2bn. On a yearto-date ba­sis, ex­ports are up 7.6% y/y and a nar­rower for­eign trade sur­plus is ex­pected in De­cem­ber as ex­port growth re­verts to the mean.

On Thurs­day we have the start- of- the- month re­leases with the Absa Jan­uary pur­chas­ing man­agers’ in­dex (PMI) first up in the morn­ing, fol­lowed by De­cem­ber elec­tric­ity data at 1pm and then De­cem­ber new ve­hi­cle sales and ex­ports in the af­ter­noon

The Bu­reau for Eco­nomic Re­search (BER) Absa man­u­fac­tur­ing in­dex eased to 44.9 in De­cem­ber from 48.6 in Novem- ber. The busi­ness ex­pec­ta­tions in­dex rose to 61.9 in De­cem­ber from 50 in Novem­ber as pur­chas­ing man­agers be­lieve a change in the ANC lead­er­ship will re­sult in stronger eco­nomic growth this year and econ­o­mists are hop­ing that this will pull the PMI above the breakeven 50 level. The last time the PMI was above 50 was in May 2017.

The busi­ness ac­tiv­ity (out­put) in­dex how­ever slumped to 42.7 in De­cem­ber from 48.0 in Novem­ber. The new sales or­ders in­dex fell to 45.0 in De­cem­ber from 49.1 in Novem­ber. The em­ploy­ment in­dex eased to 45.0 in Novem­ber from 45.6 in Oc­to­ber, while the prices in­dex slipped to 71.4 in Novem­ber from 73.2 in Oc­to­ber due to the stronger rand. The in­ven­tory in­dex fell to 43.2 in Novem­ber from 48.8 in Oc­to­ber. This slump in in­ven­to­ries may be due to a com­bi­na­tion of sup­ply dis­rup­tions caused by the bad weather in Oc­to­ber and better than ex­pected de­mand in Novem­ber.

South Africa’s to­tal elec­tric­ity con­sump­tion rose by 0.9% y/y in Novem­ber. The in­crease at end- user stage, in other words dis­trib­uted to prov­inces and not used in power sta­tions, showed a stronger in­crease and was up 2.1% y/y in Novem­ber. We should see a y/y in­crease in De­cem­ber as in­dus­trial pro- duc­tion has been on a re­cov­ery mode re­cently with steel pro­duc­tion for in­stance up 20.9 y/y in De­cem­ber.

The Na­tional As­so­ci­a­tion of Au­to­mo­bile Man­u­fac­tur­ers of SA (Naamsa) new ve­hi­cle sales rose by 1.8% in 2017 to 557,586 units af­ter slump­ing by 11.4% in 2016.

The year ended off on a dis­ap­point­ing note as new ve­hi­cle sales fell by 2.4% y/y in De­cem­ber af­ter a string of pos­i­tive y/y changes and a re­turn to y/y growth is ex­pected in Jan­uary. The 2017 to­tal was be­low the start of the year Naamsa fore­cast of 561,000. This year Naamsa ex­pects a rise to 572000.

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