July CPI released this week, minor stats give colour to economic performance

THERE will be several data releases next week, but the main focus of economists will be on the July consumer price index, which will be released on Wednesday. The week starts off with a flurry of minor statistical releases.

The June tourist arrivals, land transport, food and beverages and tourism accommodation help to give colour on how the different sectors of the economy are performing.

A neglected data release tends to be the report on capital expenditure by the public sector for the year 2017. This was due to have been released on August 16, but will now be released on Monday.

The Nedbank capital expenditure listing for the first half of 2018 showed that fixed investment activity remained weak and was still undermining the improvement in business confidence following the ANC’s leadership transition in December 2017.

Tourist arrivals were unchanged year-on-year (y/y) in May, after rising by 8.5% y/y in March, but they fell by 5.7% y/y in April.

The April fall was due to the shift of Good Friday from April last year to March this year, so economists had anticipated a y/y decline.

They were hoping for a return to y/y growth in May, but expected a y/y decline in June, as the heat wave in the UK may have kept some UK tourists at home.

The UK is the largest source country for overseas tourists to South Africa.

Income from tourism accommodation fell by 2.3% y/y in May, after a 3.7% y/y decline in April. Economists expect another y/y decrease in June. The number of stay units sold for the total industry plunged by 7.0% y/y in May, largely due to a 29.5% y/y slump at guest farms and guesthouses. The number of stay units sold at hotels fell by 2.9% y/y in May after a 0.4% y/y gain in April.

Nominal income in the food and beverage industry grew by 11.1% y/y in May, after a 8.8% y/y gain in April and a 12.7% y/y jump in March. Takeaway outlets missed the holiday crowds, as income growth slowed to 3.1% y/y in April, after a 14.8% y/y surge in March, but then recovered to a 13.0% y/y increase in May.

Restaurant income continued to show strong growth, with a 11.7% y/y gain in May, after a 13.8% y/ y increase in April. Catering services’ income returned to y/y growth in the fourth quarter of 2017, following several months of y/y declines due to the cutback in catering for government. In May, there was a 3.9% y/y gain.

The tonnage transported by land slowed to a 1.1% y/y rise in May, after a 6.2% y/y increase in April. This was driven by a slowdown in the tonnage moved by road to only a 1.2% y/y rise in May, after a 9.5% y/y jump in April. Rail transport tonnage rose by 0.8% y/y in May, after a 2.6% y/y drop in April, due to derailments on the Sishen-Saldanha iron ore line.

Consumer inflation rose to 4.6% y/y in June, from 4.4% y/y in May and economists expected a further rise in June, due to the jump in the fuel price. The Gauteng petrol price increased by 24.6% y/y in July, after a 16.6% y/y rise in June.

Food inflation was the determining factor in 2017 and 2016, as the drought caused food prices to rise in 2016 and the record maize harvest in 2017 led to food prices easing.

Food inflation edged up to 3.1% y/y in June, from 3.0% y/y in May. Core inflation, which excludes volatile components such as food and energy, eased to 4.2% y/y in June, from 4.4% y/y in May.