Liquidations increase amid weak economic growth

LIQUIDATIONS rose in November amid low economic growth, but some improvement is expected next year.

There were 15.9% more liquidations (22 more cases) this November than in November last year, Statistics SA said.

The trend remained negative with liquidations in the three months to November 7.1% higher than in the previous matching quarter. There were 2.9% more insolvencies in the first 10 months than in the first 10 months of 2015.

The insolvencies estimate for October 2016 was 1.9% higher than for the previous October, and that for the three months to October 4.4% higher than for the previous matching period.

Economists predict 2016’s GDP growth will be in a 0%-0.5% range with recent disappointing retail, manufacturing and mining data raising the chances of weak fourth-quarter growth. But GDP is expected to lift above 1% in 2017.

Much depends on the consequences of tomorrow’s US interest-rate increase and the Fed’s more hawkish stance on 2017 and 2018.

Old Mutual Investment Group chief economist Rian le Roux said the 2017 world economic outlook remained reasonably constructive with moderate improvement expected in growth, led by the US.

“Such an outcome should also benefit SA, given our high reliance on foreign trade,” he said. — BDLive