Num­bers show how Eskom hurts SA

The Citizen (KZN) - - Business -

SA’s power cuts hurt the econ­omy in the fourth quar­ter – and two data points yes­ter­day showed just how bad it was.

Pro­duc­tion by man­u­fac­tur­ers fell 5.9% year-on-year in De­cem­ber – the most in five-and-a-half years. And for the first time in at least 11 years, the unem­ploy­ment rate didn’t fall in the fourth quar­ter, un­moved at 29.1%.

Eskom, gen­er­a­tor of about 95% of the na­tion’s elec­tric­ity, im­ple­mented the widest black­outs yet in De­cem­ber to pre­vent the grid from col­laps­ing. That weighed on busi­ness con­fi­dence, adding to the neg­a­tive sen­ti­ment about the util­ity’s fi­nances.

“We are now see­ing how the

Eskom prob­lems are start­ing to show up in the of­fi­cial data,” said Jacques Nel, an economist at NKC African Eco­nom­ics.

The unem­ploy­ment rate stayed at the high­est in at least a decade.

The trade and man­u­fac­tur­ing sec­tors shed the most jobs in the fourth quar­ter, a pe­riod dur­ing which re­tail­ers of­ten em­ploy ex­tra tem­po­rary staff for Christ­mas-re­lated sales.

The job­less num­ber is “a sign of how weak the econ­omy is: busi­ness con­fi­dence is bad, con­sumer con­fi­dence is in neg­a­tive ter­ri­tory and growth re­mains weak”, said Christie Viljoen, an economist at PwC.

The de­cline in trade jobs

“shouldn’t have been the case in the fourth quar­ter with Black Fri­day and Christ­mas. It shows that re­tail­ers were pre­par­ing for a dis­ap­point­ing fes­tive sea­son, which is con­cern­ing”.

Yes­ter­day’s data won’t be the last to show the neg­a­tive im­pact of the De­cem­ber out­ages. While re­tail sales prob­a­bly grew, a Bloomberg sur­vey shows it would have been slower than in Novem­ber. And a re­port due to­mor­row may show min­ing pro­duc­tion dropped 3.5% in the last month of the year – the most since the pre­vi­ous De­cem­ber, ac­cord­ing to the me­dian es­ti­mate of five economists in a sep­a­rate sur­vey. – Bloomberg

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